• AUD/JPY rebounded due to possible positive sentiment in the market after the Fed decided to maintain the current interest rate.
• The Japanese Yen experienced an increase during the morning hours in New Zealand driven by another possible government intervention.
• Australian Bureau of Statistics reported a Trade Balance (MoM) with a surplus lower than expected in April.

AUD/JPY edges higher on Thursday after paring daily losses. The Japanese Yen (JPY) saw an uptick during the morning in New Zealand driven by another possible government intervention, marking the second occurrence this week. However, it later relinquished its gains following the release of the Bank of Japan (BoJ) Board members' insights into the monetary policy outlook during Thursday's session, as documented in the BoJ Minutes from the March meeting.

According to Reuters, a member mentioned that the economy's response to a short-term rate increase to approximately 0.1% is expected to be minimal. Several members expressed the belief that long-term rates ought to be primarily determined by market forces. Additionally, a few members suggested that the Bank of Japan should eventually consider decreasing its bond purchasing and scaling down its bond holdings.

The Australian Dollar (AUD) receives support, potentially buoyed by the prevailing positive sentiment in the market following the US Federal Reserve's decision to maintain interest rates at 5.25%-5.50% during Wednesday's policy meeting. Furthermore, Fed Chair Jerome Powell dismissed the likelihood of a further rate hike, contributing to the positive outlook. Nevertheless, the anticipation of interest rate hikes in Australia later this year remains on the table.

Australia’s Trade Balance and Building Permits data showed weaker-than-expected readings, which could contribute to downward pressure on the Australian Dollar. These disappointing readings could dampen the hawkish sentiment surrounding the Reserve Bank of Australia's (RBA)'s stance on maintaining higher interest rates throughout 2024.