AUD/USD, USD/JPY Steady as RBA and BoJ Decisions Loom on Risk Rally

Global equity and currency markets traded firmer as investors positioned ahead of imminent Reserve Bank of Australia and Bank of Japan policy decisions. RBA Governor Michele Bullock told a parliamentary committee on Friday that the board must assess whether the current cash rate setting remains appropriate, a comment traders read as leaving the door open in both directions and keeping AUD/USD pinned in its recent range. The BoJ, meanwhile, is expected to continue normalising policy, a factor that has capped USD/JPY upside despite the Federal Reserve's hawkish stance. Improving US-China diplomatic engagement added to the constructive risk backdrop, supporting commodity-linked currencies such as the Australian and New Zealand dollars. Near term, AUD/USD direction hinges on the RBA's tone around inflation persistence and labour market resilience, while USD/JPY remains sensitive to any BoJ guidance on the pace of further hikes. Traders should expect elevated intraday volatility around both announcements, with breakout risk in AUD/USD and sharp two-way moves in yen crosses including AUD/JPY.