The AUD/JPY pair is consistently declining for the past five trading sessions as investors are anticipating that the Bank of Japan (BoJ) could tweak its Yield Curve Control (YCC) in its upcoming interest rate policy on July 28. The BoJ has maintained an ultra-dovish monetary policy for a decade considering the fact that overall demand is extremely weak due to which inflation has remained below the desired rate. As inflation in Japan is becoming more demand-driven due to rising wages and the contribution of higher import prices in inflationary pressures has started fading. A recovery in the overall demand could allow BoJ Governor Kazuo Ueda to tweak its YCC.

Meanwhile, the Australian Dollar is struggling to find support despite a hawkish commentary from Reserve Bank of Australia (RBA) Governor Philip Lowe. RBA Lowe has opened doors for further policy-tightening as the picture of inflation and its outlook is complex. Philip Lowe warned that economic growth will remain subdued in the next couple of years. The RBA has made a fresh amendment to its monetary policy structure. Australian central bank will conduct monetary policy eight times from next year against 11 policy meetings. Meanwhile, the Australian government is also looking for a new candidate to handle monetary policy operations as the tenure of Philip Lowe will be over soon. Going forward, investors will focus on forward-year consumer inflation expectations, which will release on Thursday at 1:00 GMT. The economic data is expected to soften to 5.1% vs. the former release of 5.2%.