• AUD/JPY appreciates due to improved risk-on sentiment following reduced fears of a US recession.
• RBA Governor Michele Bullock anticipates no rate cuts in the near term.
• The Japanese Yen may advance further due to the rising odds of a further rate hike by the BoJ.

AUD/JPY advances further for the second consecutive day, trading around 98.90 during the early European session on Friday. The Australian Dollar (AUD) gains ground against the Japanese Yen (JPY) due to improved risk sentiment following the stronger-than-expected recovery in US Retail Sales, which has eased concerns about a potential recession in the United States (US).

Additionally, hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock are boosting the Aussie Dollar and underpinning the AUD/JPY cross. On Friday, Governor Bullock emphasized that the Australian central bank is focused on potential upside risks to inflation and does not foresee any rate cuts in the near future. The board believes it has found the right balance between curbing inflation and maintaining stability in the current economic environment, per ABC News.

Earlier this week data reported in China showed that Retail Sales grew by 2.7% year-on-year in July, exceeding market forecasts of 2.6% and accelerating from June's 17-month low of 2.0%. This might have supported the Aussie Dollar as both countries are close trade partners.