AUDUSD drops on Japan tax delay

The Australian dollar dropped against its US counterpart on Wednesday, as Japan`s decision to delay the second planned sales tax hike.

Japan’s Prime Minister Shinzo Abe announced plans to delay a sales tax hike in addition to calling on for early elections, pushing the Japanese yen to drop to its lowest level in seven years against the US dollar.

The Australia dollar lost some of its support yesterday after releasing the results of the Australian Central Bank meeting, which pointed to keeping interest rates low for another round to support the country’s economy.

The AUDUSD pair recorded its lowest levels in late Asian trading at 0.8655, dropping to 0.8637 at 9:54 GMT.