CFD Trading Rate Australian Dollar vs Japanese Yen (AUDJPY)

• Building momentum is indicated by the RSI on the daily chart.
• The hourly chart also strengthens the positive outlook, with the presence of bullish momentum but hinting at a slight wobble.
• The pair recovered the 20-day SMA affirming the continued bullish sentiment.

During Wednesday's session, the AUD/JPY edged higher. The strength of the buyers primarily on the daily chart fuels this bullish sentiment. However, the hourly chart flashes signs of short-term contention, suggesting a potential consolidation for the rest of the session.

On the daily chart, the AUD/JPY pair indicates some bullish momentum. The Relative Strength Index (RSI) has moved into positive territory, which marks an upbeat momentum, with its latest reading standing slightly above the midpoint. Simultaneously, the Moving Average Convergence Divergence (MACD) histogram printing flat red bars indicates a decreasing bearish momentum in the short term.

AUD/JPY daily chart

Switching to the hourly chart, the RSI is treading in the positive region, confirming the bullish daily scenario. However, the index seems to be consolidating after nearing overbought conditions earlier in the session. In addition, the MACD histogram reveals decreasing green bars, suggesting the bullish momentum is waning on the hourly chart.

AUD/JPY hourly chart

In conclusion, both the daily and hourly charts suggest a bullish momentum, notwithstanding the short-term signs of a pullback. Given the pair's position being above the 20,100,200-day SMAs, the overall trend remains in favor of the buyers, unless a significant shift in momentum is seen.

• AUD/JPY recovers intraday losses on improved S&P/ASX 200 Index.
• Aussie GDP grew by 0.2% in Q4 2023, against the anticipated 0.3%.
• Attendees of the BoJ could advocate for lifting negative interest rates in the March meeting.

AUD/JPY reverses its daily losses on the improved ASX 200 Index and moves into the positive territory on Wednesday. The cross hovers around 97.60 during the European trading hours. During the Asian hours, the AUD faced downward pressure as the S&P/ASX 200 Index encountered challenges, reflecting a sell-off in technology stocks on Wall Street and lower mining stocks.

Despite softer-than-expected Gross Domestic Product (GDP) (Q4), the Australian Dollar remained relatively unaffected. The GDP grew by 0.2% quarter-on-quarter in the fourth quarter of 2023, slightly below market expectations of no change at 0.3%. However, on a year-on-year basis, GDP expanded by 1.5%, surpassing the expected 1.4%, albeit falling short of the previous growth of 2.1%.

The AUD/JPY cross could encounter resistance following reports from Jiji Press suggesting that attendees of the upcoming Bank of Japan (BoJ) policy meeting on March 19 may advocate for "lifting negative interest rates." However, BoJ Governor Kazuo Ueda expressed skepticism on Friday regarding the sustainability of Japanese inflation reaching the 2% target. With the unexpected possibility of a recession, the BoJ may delay its plans for monetary policy tightening.

According to Reuters, an unnamed source indicates that the BoJ is likely to maintain its forecast for a moderate economic recovery but may revise its assessment of consumption and factory output at the March meeting.

Tuesday’s data showed a rebound in the Tokyo Consumer Price Index (CPI) from a 22-month low in February. This development has reignited discussions about the possibility of the Bank of Japan (BoJ) exiting the negative interest rates regime, which, in turn, has bolstered the Japanese Yen.

• The AUD/JPY is trading down at 97.73 with losses in Tuesday’s session.
• Despite operating above the main SMAs, indicating long-term bullish sentiment, the short-term scenario is dominated by selling pressure.
• The daily RSI remaining pointing down, and MACD depicting an increase in red bars both signal growing selling momentum.

For Tuesday's session, AUD/JPY is exchanging hands at a level of 97.73, recording a minor decline of 0.19%. Despite the selling exertion evident on the daily chart, there appears to be a broader remains bullish as the pair continues trading above its main Simple Moving Averages (SMAs).

On the daily chart, the Relative Strength Index (RSI) for AUD/JPY remains in negative territory, while, the Moving Average Convergence Divergence (MACD) histogram is rising with red bars, indicating an increase in negative momentum.

AUD/JPY daily chart

Turning to the hourly chart, the RSI dipped into oversold territory earlier in the session, suggesting a strong bearish outlook very short term, and now the index recovered near its midline point suggesting that sellers are taking a breather. This view is corroborated by the rising green bars of the MACD.

AUD/JPY hourly chart

Overall, the AUD/JPY pair seems to be under selling pressure in the short term despite the broader bullish context suggested by its position above the 100 and 200-day SMAs. For the rest of the session, the pair may continue correcting oversold conditions hit earlier in the session.

• The AUD/JPY is trading at 98.04, marking a 0.12% gain during Monday's session.
• The RSI on both daily and hourly charts is in the positive zone, but momentum is limited.
• The overall trend remains bullish as the buyers recovered the 20-day SMA.

In Monday's session, the AUD/JPY pair is trading at 98.04, reflecting a 0.12% gain. Despite a slight decrease in buying momentum, there's an overall moderate bullish sentiment dominating the market as indicators seem to recover after recent declines.

On the daily chart, the AUD/JPY pair's Relative Strength Index (RSI) is currently in positive territory, indicating that buyers have had the edge recently after diving below 50. Despite slight decreases in the latest readings, there's still a moderate bullish momentum. The Moving Average Convergence Divergence (MACD) histogram shows flat red bars, suggesting a loss in positive momentum but a still mildly bullish sentiment in the market.

AUD/JPY daily chart

Switching to the hourly chart, the RSI values present a similar picture, hovering in the positive territory, and the MACD histogram continues with red decreasing bars, indicating a loss in selling momentum but a flattened buying traction. The readings imply that the pair is experiencing similar dynamics on a shorter-term scale.

AUD/JPY hourly chart

By contrasting the daily and hourly charts, indicators suggest a consistent bullish momentum, albeit with decreased intensity. Despite the short-term neutral-to-negative outlook, the pair's position above the 20, 100, and 200-day Simple Moving Averages (SMAs) reinforces the perspective that buyers are in control in a broader market view.

• AUD/JPY breaks its four-day losing streak on Friday.
• BoJ Governor Kazuo Ueda expresses skepticism regarding inflation reaching the 2% target.
• S&P/ASX 200 Index tracked gains on Wall Street, supporting the AUD.

AUD/JPY snaps its four-day losing streak, improving to near 97.80 during the European session on Friday. The Australian Dollar (AUD) bolsters by the rise in the S&P/ASX 200 Index and gains on Wall Street, supporting the AUD/JPY cross.

Furthermore, positive data such as the Judo Bank Manufacturing PMI on Friday, which showed a slight improvement in Australia's manufacturing sector, and recent Retail Sales and Private Capital Expenditure data have contributed to the strength of the Aussie Dollar (AUD).

Additionally, the Aussie Dollar (AUD) might have received upward support from the Judo Bank Manufacturing PMI indicated a slight improvement in Australia's manufacturing sector, with the February reading rising to 47.8 from 47.7 in the previous period. Additionally, the recent Retail Sales and Private Capital Expenditure data bolstered the AUD on Thursday.

The Japanese Yen (JPY) could have struggled after the Bank of Japan (BoJ) Governor Kazuo Ueda expressed skepticism regarding the sustainability of Japanese inflation reaching the 2% price growth target. Ueda mentioned that the recent economic downturn represents a rebound from previously robust quarters. Inflationary pressures are subsiding at an accelerated rate, offering some relief. This could prompt the BoJ to delay its plans to tighten monetary policy, which in turn, undermines the Japanese Yen.

BoJ Governor Ueda stated that anticipated wage negotiations are expected to provide additional support. Japan's economic recovery is projected to persist gradually. He emphasizes the importance of evaluating the collective results of wage negotiations and firm hearings before assessing wage data. Expectations are for a rebound in Japan's consumption, particularly with promising outcomes anticipated from spring wage talks.

• The AUD/JPY currently trades at 97.42, undergoing a 0.43% loss in Thursday's trading session.
• The daily chart shows a shift in RSI from positive to negative territory.
• If the AUD/JPY holds above the 100 and 200-day SMA the outlook will still be positive.

The AUD/JPY pair is currently trading at 97.42, marking a 0.43% loss. The pair is navigating moderate selling pressure, suggesting control from the sellers' side, albeit the bulls maintaining ground as the pair stands above key Simple Moving Averages (SMAs).

Considering the daily Relative Strength Index (RSI), a downward trend from positive territory into negative was seen. Combined with the rising red bars of the Moving Average Convergence Divergence (MACD) histogram, this indicates a shift in momentum toward sellers. Despite previously maintaining strength within positive territory, mild signs of price exhaustion emerged after hitting multi-year highs recently.

AUD/JPY daily chart

On an hourly chart, the RSI has remained within the negative territory, suggesting sustained selling pressure over the past hours. The MACD histogram, with flat green bars, confirms this bearish signal. A notable divergence between daily and hourly charts occurs, as the former has just entered a negative zone while the latter has been quite negative already. This underlines the speed and intensity of the bearish swing.

AUD/JPY hourly chart

Counterbalancing this pessimistic outlook, the AUD/JPY pair holds above its key 100 and 200-day Simple Moving Averages (SMAs),  following the dip under the 20-day SMA. This suggests that despite the sudden bearish inclination, the bulls may not have entirely lost the game yet concerning the longer timeframe.

• AUD/JPY trades on a softer note near 97.65 in Thursday’s early European session. 
• A fresh verbal intervention and growing speculation that the BoJ will exit from ultra-loose monetary policy lift the Japanese Yen. 
• Australian Retail Sales rose 1.1% MoM in January, below the expectation of 1.5% MoM.  

The AUD/JPY cross trades in negative territory for the fourth consecutive day during the early European trading hours on Thursday. The downtick of the cross is supported by the verbal intervention and hawkish remarks from Bank of Japan (BoJ) board member Hajime Takata. At press time, AUD/JPY is trading at 97.65, down 0.24% on the day. 

On Thursday, BoJ board member Hajime Takata said that the Japanese central bank needs to consider a flexible approach, including an exit from negative interest rates and bond yield control. Earlier this month, BoJ Deputy Governor Shinichi Uchida stated that the central bank will review other components of its stimulus framework upon ending negative rates. That being said, the hawkish comments from the Japanese authorities provide some support to the Japanese Yen (JPY) and act as a headwind for the AUD/JPY cross.  

Meanwhile, a fresh verbal intervention from Japanese authorities might cap the upside of the cross. Japan's top currency diplomat Masato Kanda stated that the central bank will take appropriate action if currency moves are deemed too volatile. 

On the Aussie front, Australian Retail Sales climbed by 1.1% MoM in January from a 2.7% fall in December, worse than the market expectation of an increase of 1.5%. The Australian Retail Sales figures might convince the Reserve Bank of Australia (RBA) to consider holding interest rates for longer.

Looking ahead, market players will keep an eye on the Australian Judo Bank Manufacturing PMI for February, along with the Japanese Unemployment Rate for January and the Jibun Bank Manufacturing PMI. Traders will take cues from the data and find trading opportunities around the AUD/JPY cross. 

• The AUD/JPY is currently trading at around 97.90, reflecting a decrease of 0.55% in Wednesday's session.
• Although the daily RSI MACD on the AUD/JPY hints at fading momentum, buyers continue establishing their upper hand.
• However, the hourly chart indicators suggest stronger selling activity with the RSI venturing into oversold regions.

In Wednesday's session, the AUD/JPY fell to around 97.90, losing 0.55%. The short-term technical outlook hints towards a shift in command from the bears to the bulls while the overall bullish trend remains positive.

On the daily chart, the Relative Strength Index (RSI) for the AUD/JPY pair remains in positive territory, although with a declining trend. Despite the recent dip in the RSI, considering it still sits above the 50 mark, the buying pressure somewhat outweighs the selling pressure in the prevailing market conditions. However, a continuous downtrend, indicated by the RSI's negative slope since its recent peak, signifies a weakening in the buying momentum.

On the other hand, witnessing decreased green bars in the Moving Average Convergence Divergence (MACD) histogram indicates cues for a potential shift in trend. A falling MACD histogram generally means that the positive momentum is dwindling, indicating the sellers might be set to take control.

AUD/JPY daily chart

On the hourly chart, the RSI fluctuates in the negative territory, signaling increased selling activity. However, presenting a sharp contrast to the daily chart data, the hourly RSI ventures into the oversold area, which often points to a potential price correction in the near term to the upside. Also, the hourly MACD illustrates a weakening bearish momentum as suggested by the decreasing red bars which may suggest that an upward correction may be incoming..

AUD/JPY hourly chart

In retrospect, while the daily data illustrates a bullish trend, the hourly data presents that the bears took control but a slight upward correction shouldn’t be taken off the table for the rest of the session. The pair remains above the key Simple Moving Averages of 20,100 and 200 days, indicating a long-term bullish sentiment, despite short-term bearish glimpses.

• The AUD/JPY is trading at 98.49, recording a 0.10% daily decline in Tuesday's session.
• The Japanese Yen is strengthening, propelled by an unexpected surge in Japan's January CPI data.
• Speculations of a shift in the Bank of Japan's hawkish policy are emerging, although disinflationary pressures persist.

The AUD/JPY pair is trading at 98.49, a minor 0.10% drop in Tuesday's session. This slight decline is observed amid the strengthening of the Japanese Yen, attributed to the surge in Japan's Consumer Price Index (CPI) during January.

In that sense, Japan's latest national CPI figures for January indicated a slight increase above expectations. The headline inflation rate was reported to have risen by 2.2% (YoY), against a forecast of 1.9%, and down from 2.6% in December. The core inflation rate, which excludes fresh food, was recorded at 2.0% YoY, meeting the expectations of 1.9% and a decrease from 2.3% in the previous month. Following the figures, both the JPY and the yields on Japanese Government Bonds (JGB) experienced an uptick, with the 2-year yield reaching its highest point since 2011 as markets renewed their hopes on a sooner liftoff of the Japanese banking authority. However, it's worth mentioning, that inflation is still trending downward, suggesting the Bank of Japan (BoJ) has room to maintain a cautious approach towards policy normalization. As for now, markets are gearing up for a liftoff in June, but the bank may delay it further.

AUD/JPY technical analysis

On the daily chart, the Relative Strength Index (RSI) predominantly roams in positive territory, emphasizing a fair control of buyers over the market's direction. Despite some of its negative slope, the pair maintains its foothold in the positive zone, signaling that the bulls are still in charge.

Simultaneously, decreasing green bars on the Moving Average Convergence Divergence (MACD) histogram denotes a decline in positive momentum. Buyers, though active, are gradually losing ground, encouraging caution on the part of the bulls. However, the pair is still above its main Simple Moving Averages (SMAs) of 20,100, and 200 days, which suggests that the overall trend is still bullish, and the mentioned downward movements could be considered as a consolidation.
 

AUD/JPY daily chart

• The AUD/JPY is trading at 98.50, falling by 0.25% during Monday's session.
• Daily RSI for the AUD/JPY oscillates in the positive zone with a slight shift towards the sellers.
• On the hourly scale, the RSI settles in negative territory, signaling a short-term bearish correction.
• Indicators are consolidating the gains that took the pair to multi-year highs.

The AUD/JPY is currently trading at 98.50, with a slight dip of 0.25%. Based on the mix of indicators, the pair has a predominantly bullish bearing, although there are mild bearish hints on the shorter time frames. In that sense, the downward movements can be seen as a mere technical correction of the pair needed to consolidate the gains that took it to highs since 2015.

On the daily chart, considering the recent Relative Strength Index (RSI) values, the index shows a slight decline, implying a minor shift in favor of the sellers near the overbought zone. Nonetheless, the positioning in the above half domain indicates that buyers still exercise control. Turning to the daily Moving Average Convergence Divergence (MACD), the histogram's decreasing green bars signal fading positive momentum. Despite this deceleration, the positive color implies that the bulls may still have some fuel to counterattack the bearish pulls.

AUD/JPY daily chart

On an hourly chart, the RSI has settled into the negative band, depicting a conflicting scenario between the short-term and the broader perspective. Concurrently, the MACD histogram shows an uptrend but it is characterized by red bars, pointing to a build-up of negative momentum.

AUD/JPY hourly chart

In summary, the AUD/JPY exhibits bullish signals from a general perspective, supported by its position above its main SMAs and positive territory representation by the daily RSI and MACD. However, bearish cues emerge on an hourly scale and maybe a warning that the bulls may take a breather in the next sessions to consolidate gains.

• AUD/JPY kicks off the new week on a weaker note and moves away from a multi-year peak.
• Geopolitical risks and intervention fears underpin the JPY and exert pressure on the cross.
• The RBA’s hawkish outlook and BoJ policy uncertainty should help limit any further losses.

The AUD/JPY cross comes under some selling pressure during the Asian session on Monday and snaps an eight-day winning streak to the 99.00 mark, or its highest level since December 2014. Spot prices currently trade around the 98.60 region, with bears now awaiting a sustained break and acceptance below the 100-hour Simple Moving Average (SMA) before positioning for any further losses.

Against the backdrop of geopolitical risks, speculations that Japanese authorities will intervene to stem any further weakness in the domestic currency turn out to be a key factor behind the Japanese Yen's (JPY) relative outperformance. The Australian Dollar (AUD), on the other hand, is weighed down by the risk of a further escalation of tensions between China and Taiwan. This, in turn, is seen exerting some downward pressure on the AUD/JPY cross.

That said, the recent optimism led by hopes for additional stimulus from China might continue to act as a tailwind for the China-proxy Aussie. Apart from this, the Reserve Bank of Australia's (RBA) hawkish stance, signalling that policymakers are unwilling to rule out another cash rate increase in the wake of sticky inflation, could lend support to the AUD. This, in turn, warrants some caution before placing aggressive bearish bets around the AUD/JPY cross.

Meanwhile, a recession in Japan seems to have dashed hope for an imminent shift in the Bank of Japan's (BoJ) policy stance in the coming months. This could keep a lid on any meaningful appreciating move for the JPY and contribute to limiting the downside for the AUD/JPY cross. Hence, it will be prudent to wait for strong follow-through selling before confirming that spot prices have topped out and positioning for a deeper corrective decline.

• The AUD/JPY is trading at 98.71, showing a slight gain during the Friday session still in highs since 2015.
• Daily RSI for the AUD/JPY suggests bullish momentum with a slight increase in the positive area.
• Divergences are observed between the hourly and daily charts where the latter signals buyers' dominance whilst the hourly chart indicates rising short-term selling pressure.

In Friday's session, the AUD/JPY pair is trading at 98.715, reflecting a slight increase in buying pressure. The daily chart signals that the buyers are in control but that bears are starting to wake up, while in the hourly chart, the consolidation is more evident with indicators losing ground.

On the daily chart, the Relative Strength Index (RSI) pair shows a positive stance, signifying the dominance of buyers. This can be inferred from RSI territory, which consistently remains positive, despite a marginal downtrend observed within the positive territory. This suggests a slight increase in selling pressure, however, buyers continue to hold dominance given the RSI's positive territory position.

Concurrent with this, the daily Moving Average Convergence Divergence (MACD) is exhibiting flat green bars. This indicates that the momentum of the market is neutral on the surface, yet further scrutiny reveals that buyers hold the upper hand as the pair lingers above the 20, 100, and 200-day Simple Moving Averages (SMAs).

AUD/JPY daily chart

Upon examining the hourly chart, the RSI's position has diverted into negative territory while the MACD presents rising red bars suggesting a surge in selling pressure in the short term, contrasting the positive bias observed in the daily chart.

AUD/JPY hourly chart

Conclusively, despite a short-term rise in selling pressure observed in the hourly chart, the longer-term daily chart suggests that buyers continue to control the market, fortified by the pair's position above the 20, 100, and 200-day SMAs.

• AUD/JPY surged to an all-time high as the Australian ASX 200 Index rose higher.
• BoJ could delay the plan of exiting from negative rates as Japan entered into a technical recession.
• Australian Dollar strengthened as recent PMI data indicated that February's economic activity returned to growth.

AUD/JPY rises to an all-time high near 99.00 during the European session on Friday, extending its winning streak that commenced on February 14. Market participants are concerned about the potential delay in the Bank of Japan's (BoJ) plan to exit from negative interest rates in the near term, particularly after last week's data showed that the Japanese economy entered into a technical recession. This downward pressure on the Japanese Yen (JPY) provides support for the AUD/JPY cross.

Furthermore, the surge in global money markets, as investors digest dashed hopes for interest rate cuts by major central banks worldwide, is exerting downward pressure on the safe-haven Japanese Yen (JPY). Conversely, Australia’s S&P/ASX 200 index moved higher following the overnight surge on Wall Street, which provides upward support for the Australian Dollar (AUD). This collective dynamic is contributing to the strength of the AUD/JPY cross.

Furthermore, investors persist in borrowing Japanese Yen (JPY) to invest in higher-yielding assets denominated in other currencies. However, recent verbal intervention by Japanese authorities may offer some support for the JPY. Vice Finance Minister for International Affairs Masato Kanda stated last week that authorities would take necessary actions if required.

Earlier in the week, the Japanese Yen received a boost from better-than-expected Trade Balance figures released by the Ministry of Finance of Japan. Market participants are now eagerly awaiting the release of Japan’s National Consumer Price Index (CPI) data scheduled for Tuesday.

The Australian Dollar (AUD) received upward support from domestic PMI data indicating that private sector activity returned to growth in February for the first time in five months, driven by a robust expansion in the services sector. Furthermore, the Aussie Dollar was buoyed by market sentiment suggesting the likelihood of no immediate rate cuts following the recent Meeting Minutes from the Reserve Bank of Australia (RBA).

• The AUD/JPY is currently trading at 98.648, marking a 0.20% increase in Thursday's session.
• The daily RSI for AUD/JPY suggests bullish momentum with an upward trend, indicating buyers are in charge.
• Despite intraday market volatility, the hourly RSI stays in the positive territory, underlining buyer's dominance.
• AUD/JPY's position above its main moving averages confirms the bullish outlook.

The AUD/JPY pair was seen trading at 98.648, marking a mild gain of 0.20% and reaching its highest level since 2015. The pair predominantly exhibits a bullish bias, per the insights from the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) on the daily chart. The RSI portrays a progressive uptrend, indicating consistent strengthening over recent sessions. This is further confirmed by the ascending green bars on the MACD histogram, signifying a favorable momentum. Despite some intraday fluctuations, the pair remains firmly in the hands of the buyers, being well positioned above the key Simple Moving Averages (SMAs) of 20,100 and 200 days.

The hourly RSI values paint a similar picture, despite some intraday volatility seen in the market. Although the RSI didn't maintain its position within the positive territory at all hours, it did stay above the negative zone, reflecting an overall bullish intraday sentiment.

In conclusion, despite some short-term uncertainties, the general outlook for the AUD/JPY pair seems bullish given the positive RSI values and rising MACD histogram. Whether looking at the daily or hourly chart, the momentum remains firm for the buyers, supported by the pair's position well above its primary moving averages.

AUD/JPY daily chart

AUD/JPY hourly chart

• The AUD/JPY trades on gains at 98.33 in Wednesday's session.
• Daily RSI for AUD/JPY suggests bullish momentum with a rising tendency and positive MACD.
• Hourly chart signals possible short-term bearish correction in a bullish bias.
• AUDJPY operating above key SMAs indicates long-term bullish sentiment.

In Wednesday's session, the AUD/JPY pair was spotted making moderate gains, trading at the 98.33 level. The technical landscape exhibits a generally bullish sentiment, boosted by positive momentum in the daily Relative Strength Index (RSI) RSI and Moving Average Convergence Divergence (MACD) histogram. However, a contrasting short-term bearish bias can be glimpsed on the hourly charts, suggesting possible corrective phases. Despite this, the prevailing upward drive exemplified by the pair's position above key SMAs aligns the broader perspective with the bulls.

The daily RSI for the AUDJPY pair hovers in the positive territory with a rising tendency indicating growing bullish momentum in the market. Meanwhile, the MACD histogram prints green bars, signifying positive momentum, and presents an incline that confirms the increasingly bullish sentiment.

AUD/JPY daily chart

Switching to the hourly perspective, the RSI trends lower into the negative territory. This divergence in the RSI values on the daily and hourly charts could hint at a near-term corrective bearish phase within the dominant bullish bias. The MACD histogram here is currently falling, producing red bars, suggesting a slightly stronger negative momentum in the vicinity.

AUD/JPY hourly chart

However, on a broader outlook, with the AUD/JPY operating above its primary SMAs (20, 100, 200-day), indicates the long-term sentiment favors the bulls. Thus, any short-term weakness might be perceived as a healthy technical correction.

• AUD/JPY continues to gain on expected RBA’s hawkish stance about interest rates trajectory.
• Australian Dollar could face hurdles amid softer S&P/ASX 200 Index.
• Japan’s Merchandise Trade Balance Total declined by ¥1,758.3B against the expected deficit of ¥1,925.9B.

AUD/JPY extends its winning streak for the sixth consecutive day as the Australian Dollar (AUD) strengthens against the Japanese Yen (JPY) following the Reserve Bank of Australia's (RBA) meeting minutes, which has transformed market bias towards the possibility of no rate cuts soon. The AUD/JPY cross trades higher around 98.40 during the Asian hours on Wednesday.

The Australian Dollar (AUD) could face hurdles amid softer Aussie financial markets, as the S&P/ASX 200 Index sees its second successive decline, mirroring losses on Wall Street overnight. This downturn is primarily linked to sluggish performance in mining stocks and metal prices.

Additionally, the Australian Bureau of Statistics has unveiled mixed data on the Wage Price Index for the fourth quarter, with little observable impact on the Australian Dollar (AUD).

On the other side, the Ministry of Finance of Japan reported a Trade Balance figure better than expected, potentially supporting the Japanese Yen and thereby limiting gains in the AUD/JPY cross. Japan’s Merchandise Trade Balance Total showed a deficit of ¥1,758.3B in January, against the anticipated deficit of ¥1,925.9B and the previous reading of ¥68.9B.

Moreover, Imports (YoY) declined by 9.6%, greater than the expected drop of 8.4% and the previous decrease of 6.9%. However, Exports surged by 11.9% year-over-year, surpassing both the predicted 9.5% and the prior 9.7%.

On Tuesday, Japanese Finance Ministry official Atsushi Mimura indicated that the government is engaged in discussions with other nations regarding FX intervention. This stance may have provided some bolstering for the JPY.

• AUD/JPY extends gains on hawkish market sentiment about RBA interest rates trajectory.
• The Australian Dollar faces pressure as the S&P/ASX 200 halted its winning streak on Tuesday.
• Japanese official Atsushi Mimura talked about connecting to other countries regarding FX intervention.

AUD/JPY continues its upward trajectory for the fifth consecutive session on Tuesday, with the pair edging higher around 98.50 during European trading hours. The Australian Dollar (AUD) receives support against the Japanese Yen (JPY) as market sentiment leans towards the expectation of a resilient Australian economy, backed by low unemployment and healthy corporate sector balance sheets. Westpac anticipates that the Reserve Bank of Australia (RBA) will maintain its current monetary policy stance throughout 2024 and adopt a less restrictive approach in 2025.

However, the Australian Dollar (AUD) faced downward pressure from a weaker Aussie money market. The S&P/ASX 200 index halted its winning streak, with declines in mining and energy stocks amid weaker commodity prices, potentially limiting the advance of the AUD/JPY cross.

The Reserve Bank of Australia (RBA) released the minutes from its February monetary policy meeting. During the meeting, the RBA Board deliberated on the possibility of raising rates by 25 basis points (bps) or keeping rates unchanged.

Although recent data provided the board with increased confidence that inflation would return to target within a reasonable timeframe, there was acknowledgment that it would "take some time" before the board could be sufficiently confident about inflation. As a result, the board agreed that it was appropriate not to rule out another rate hike, indicating a cautious approach to future monetary policy decisions.

On Japan’s side, Japanese Finance Ministry official Atsushi Mimura said that the government is in communication with other countries regarding FX intervention." He mentioned that the government can sell assets such as savings and foreign bonds in FX reserves when intervention is required.

Furthermore, Finance Minister Shunichi Suzuki expressed concerns about the negative implications of a weak Yen. In an earlier interview, Suzuki noted, "The Bank of Japan (BoJ) holds jurisdiction over monetary policy. But there will come a time when interest rates rise." Market participants are likely to focus on Japan’s Trade Balance data, including Import and Export figures for January, which are scheduled to be released on Wednesday.

• AUD/JPY halts its winning streak that began on Wednesday.
• Japanese Finance Minister Shunichi Suzuki restated that interest rates will go up.
• The higher S&P/ASX 200 index supported the Australian Dollar.

AUD/JPY snaps its three-day winning streak, trading lower around 98.10 during the European trading hours on Monday. The Japanese Yen (JPY) gains ground against the Australian Dollar (AUD) on the back of improved Machinery Orders data from Japan, which in turn, undermines the AUD/JPY pair. Moreover, Japanese Finance Minister Shunichi Suzuki reiterated that “The Bank of Japan (BoJ) holds jurisdiction over monetary policy. But there will be a phase when interest rates go up”.

Japan’s Machinery Orders (MoM) increased by 2.7%, surpassing expectations of 2.5% in January, rebounding from the previous decline of 4.9%. Meanwhile, the year-over-year data showed a decline with an improved reading of -0.7%, better than the anticipated -1.4% reading and the prior decline of -5.0%. These numbers indicate a boost in business confidence within Japan’s manufacturing sector.

On the other side, the Australian Dollar likely received support from the higher S&P/ASX 200 index on Monday, which reached an all-time high, driven by increased mining stocks amid stronger metals prices. This positive market sentiment could further strengthen the Aussie Dollar, consequently bolstering the AUD/JPY cross, as investors believe that the Reserve Bank of Australia (RBA) will maintain its current monetary policy stance throughout 2024.

Westpac expects a resilient Australian economy, supported by low unemployment and healthy corporate sector balance sheets. However, Westpac anticipates the RBA to adopt a less restrictive approach in 2025.

Reserve Bank of Australia Governor Michele Bullock addressed the Australian parliament's Senate Economics Legislation Committee in the last week, acknowledging that the global economy has performed better than initially anticipated. She highlighted previous concerns about potential hard landings and recessions but indicated that the economy is currently in a favorable position to bring inflation down within a reasonable timeframe.

• AUD/JPY extends its winning streak after dovish comments from BoJ Governor Kazuo Ueda.
• BoJ Governor Ueda expects monetary conditions in Japan to remain accommodative.
• The higher S&P/ASX 200 index helped the Australian Dollar to hold ground.

AUD/JPY continues its winning streak for the third successive day, extending higher to near 98.00 during the European session on Friday. The dovish Friday’s remarks from the Bank of Japan (BoJ) Governor Kazuo Ueda weigh on the Japanese Yen (JPY) and, consequently, act as a tailwind for the AUD/JPY cross. He stated that monetary conditions in Japan are expected to remain accommodative in relevance to the current economic and price outlook.

On Thursday, the downbeat Gross Domestic Product (GDP) data confirmed that Japan’s economy has entered into a technical recession. This cements the speculation that the Bank of Japan (BoJ) may postpone exiting its negative interest rate policy, pushing investors to move away from the safe-haven Japanese Yen.

The Australian Dollar (AUD) received upward support from the S&P/ASX 200 index’s improvement tracking the overnight surge in Wall Street. The Australian economy has shown modest growth, influenced by ongoing challenges in the labor market and subdued inflationary pressures.

Moreover, the latest Aussie employment data could prevent the Reserve Bank of Australia (RBA) from pursuing further interest rate hikes in the upcoming March meeting. However, Market sentiment indicates that the RBA will likely hold its current interest rates until August and may initiate a loosening policy with 25 basis points (bps) in September.