The Australian dollar strengthened against the Japanese yen on [date] after Australia’s monthly CPI indicator for [month] rose [percentage]% year-on-year, below the previous reading of [previous]% and the consensus forecast of [consensus]%. The softer inflation data increased expectations that the Reserve Bank of Australia (RBA) could cut interest rates as early as [month/year], with money markets pricing in a [percentage]% probability of a reduction at the next meeting. Core inflation also moderated, consistent with the RBA’s view that inflation is returning to its 2-3% target band. AUD/JPY climbed to [price] during the [morning/afternoon] session, up [percentage]% from its previous close. The move was driven mainly by yen weakness after the Bank of Japan (BoJ) maintained its ultra-loose policy, preserving a wide Australian-Japanese bond yield differential. Broader risk-on sentiment and firmer commodity prices also supported the Australian dollar. Traders will watch upcoming US inflation data and the BoJ’s policy meeting later this month for further direction. A hawkish BoJ shift could strengthen the yen, while a more dovish RBA could limit gains in the Australian dollar.