RBA Rate Hike Bets Drive AUD/JPY Toward 115 Level

Key Facts

1Three of Australia's Big Four banks now expect another RBA hike this year following strong economic data.

2CPI, household spending data, and RBA minutes have all aligned to support further monetary tightening.

In a move reflecting the resilience of the Australian economy against inflationary pressures, three of Australia's Big Four banks have shifted their forecasts to expect another RBA rate hike this year. This hawkish pivot follows a string of robust economic data, including CPI and household spending figures, alongside RBA minutes that signal a readiness for further monetary tightening. According to reports, these developments have increased market conviction, pushing the AUD/JPY pair toward the 115 threshold.

The shift in bank consensus is underpinned by accelerating consumer spending and inflation data that align with the RBA's hawkish stance. Per market data, this contrast is highlighted by Japan's inflation figures (as of August 20, 2026), where the annual inflation rate reached 1.9%, exceeding the 1.7% forecast. This divergence in regional monetary outlooks continues to drive volatility in the AUD/JPY cross as markets price in the possibility of higher Australian terminal rates.

Looking ahead, market participants are focused on the upcoming RBA interest rate decision scheduled for September 1, 2026, as a primary catalyst for the pair. While current numeric price levels for AUD/JPY are unavailable at this snapshot, the qualitative outlook remains bullish as long as economic indicators support the tightening cycle. Traders should watch for further confirmation from upcoming domestic data to see if the momentum toward the 115 level sustains.