AUD/JPY holds position near 100.00 following economic figures from both countries

• AUD/JPY edges higher due to a solid labor report from Australia released on Thursday.
• Australia’s Employment Change rose by 64.1K, far exceeding the expected 25.0K increase.
• The Japanese Yen lost ground as the domestic Trade Balance reported a larger-than-expected deficit of JPY 294.3 billion in September.

AUD/JPY gains momentum after two consecutive days of losses, trading near the key psychological level of 100.00 during the European session on Thursday. This upward movement is largely driven by the strengthening of the Australian Dollar (AUD), following a robust Australian employment report.

In September, seasonally adjusted Employment Change surged by 64.1K, bringing total employment to a record 14.52 million, far exceeding market expectations of a 25.0K increase. This followed a revised rise of 42.6K in August.

Additionally, Australia's Unemployment Rate held steady at 4.1% in September, matching the revised figure for August and beating forecasts of 4.2%. The number of unemployed individuals fell by 9.2K, bringing the total to 615,700.

On the JPY’s side, the Japanese Yen (JPY) faces additional downward pressure after the release of weaker-than-expected Trade Balance data on Thursday. Japan's Trade Balance reported a deficit of JPY 294.3 billion in September, compared to August's larger deficit of JPY 703.2 billion. This marked the third consecutive month of a trade gap, and it was worse than market expectations of a JPY 237.6 billion shortfall.

Japan's exports declined by 1.7% year-over-year in September, reversing the marginally revised 5.5% growth in August and missing forecasts of a 0.5% increase. This was the first drop in exports since November 2023. Meanwhile, imports rose by 2.1% year-over-year, following a 2.3% increase in August but also falling short of the 3.2% growth expected by the market. Although this was the sixth straight month of rising imports, it represented the softest growth in the sequence.

This disappointing trade balance report adds further complications to the Bank of Japan's (BoJ) plans to exit its ultra-easy monetary policy, putting additional downward pressure on the Japanese Yen (JPY). Earlier in the week, BoJ board member Seiji Adachi cautioned that the BoJ must avoid making any drastic changes to its policy, citing uncertainties in the global economic outlook and concerns over domestic wage growth.