Rate differentials · RBA vs BoJ · priced as of 12 November 2026
AUD/JPY interest rate differential: RBA vs BoJ
As of 12 November 2026, the AUD/JPY interest rate differential is +360 bp: the RBA's cash rate at 4.85% against the BoJ's policy rate at 1.25%, in favour of the Australian dollar. Markets price the gap at +317 bp in six months and +277 bp in twelve.
Over the next six months, markets price the gap to move −43 bp over six months, towards the yen. That six-month gap has moved +1 bp in a month.
The rate spread, now and priced ahead
| RBA (AUD) | BoJ (JPY) | Gap | |
|---|---|---|---|
| Policy rate now | 4.85% | 1.25% | +360 bp |
| Priced in 6 months | 4.88% | 1.71% | +317 bp |
| Priced in 12 months | 4.68% | 1.91% | +277 bp |
| 6-month gap a month ago | 4.82% | 1.66% | +316 bp |
The gap is AUD minus JPY, in basis points (100 bp is one percentage point). Six and twelve months out is the rate implied after each bank's last meeting on or before that date. Market pricing, not a forecast. Each bank's meeting-by-meeting odds: RBA · BoJ.
The carry on AUD/JPY
The Australian dollar: the RBA pays 4.85% against 1.25%, a gap of +360 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
How the gap feeds the exchange rate, and when it does not: rate differentials explained and the carry trade explained.
Questions
What is the AUD/JPY interest rate differential?
As of 12 November 2026, the AUD/JPY interest rate differential is +360 bp: the RBA's cash rate at 4.85% against the BoJ's policy rate at 1.25%, in favour of the Australian dollar. Markets price the gap at +317 bp in six months and +277 bp in twelve.
Is the RBA–BoJ gap priced to widen or narrow?
Markets price the gap to move −43 bp over six months, towards the yen, from +360 bp now to +317 bp. A month ago (13 October) the same six-month gap was priced at +316 bp, so it has moved +1 bp since. That is market pricing, not a forecast.
Which side of AUD/JPY has the carry?
The Australian dollar: the RBA pays 4.85% against 1.25%, a gap of +360 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
Where does this pricing come from?
Each bank's priced path comes from the market instrument behind it: Exchange-traded futures, WatchTower model for RBA, Exchange-traded futures, WatchTower model for BoJ. The rate six or twelve months out is the one implied after the last meeting on or before that date. The month-ago figure is from our daily snapshot of the same curves.
More on AUD/JPY: AUD/JPY analysis · AUD/JPY retail sentiment · AUD/JPY seasonality · Australian Dollar outlook · Australian Dollar COT positioning · RBA rate expectations · Australian economic surprises · Japanese Yen outlook · Japanese Yen COT positioning · BoJ rate expectations · Japanese economic surprises
Other rate differentials: USD/JPY +275 bp · AUD/USD +85 bp · EUR/JPY +125 bp · EUR/AUD −235 bp · GBP/JPY +275 bp · GBP/AUD −85 bp · AUD/NZD +210 bp · AUD/CAD +235 bp · AUD/CHF +485 bp · NZD/JPY +150 bp · all 28
In WatchTower Terminal, the Rate spread panel draws the AUD/JPY gap against the price. Nothing here is financial advice.