- AUD/JPY stays under pressure after Japan released inflation, unemployment and industrial production data.
- Risk aversion exerts downside pressure on prices.
- Clues to the phase-one deal, second-tier Aussie data will be in the spotlight.
AUD/JPY fails to recover while taking rounds to 74.10 during Friday’s Asian session. That said, the pair pulled back from one week high during the previous day amid the market’s risk-off moves.
Japan’s November month inflation and October month Unemployment Rate numbers flash positive signs. The headline Tokyo Consumer Price Index (CPI) crossed 0.4% prior and forecast to 0.8% (YoY) while the market’s favorite Tokyo CPI ex Fresh Food matched +0.6% consensus versus 0.5% prior. Further, Tokyo CPI ex Food, Energy reprinted the previous +0.7% figure against +0.6% expected while the Unemployment Rate stood unchanged at 2.4%. Additionally, Preliminary readings of October month Industrial Production (YoY) slumped -7.4% versus +1.9% forecast and 1.3% prior whereas the MoM figure dropped below -2.1% expected and +1.7% previous to -4.2%.
Despite mostly mixed economic releases, the AUD/JPY pair showed less reaction to the data as the inflation is still way below the central bank’s 2.0% target and the industrial production declines but overall safe-haven demand favors the Japanese yen (JPY) against the Australian dollar (AUD).
AUD/JPY is considered as the market’s risk barometer. The pair recently took a U-turn from one week high as trade sentiment deteriorated amid the tension between the United States (US) and China. The reason being the US President’s passage of the Hong Kong Act that will have more interference from the US into China’s proclaimed part.
It’s worth mentioning that the US 10-year treasury yield takes round to 1.78%, near the same level where it closed on Wednesday. The same reflects that the market still awaits key trade guidelines to turn pessimistic on the recent US-China tussle.
Investors will now focus on Australia’s Private Sector Credit and HIA New Home Sales figures while having all eyes on the US-China trade/political headlines for near-term direction. Australia’s housing market number could rise to 6.6% from 5.7% while the credit data also indicates recovery to 0.3% versus 0.2% prior.
Technical Analysis
21-day Simple Moving Average (SMA) near 74.35 acts as immediate resistance holding keys to the pair’s further upside towards a 200-day SMA level of 75.42. Alternatively, 50-day SMA and a two-week-old rising trend line limit the pair’s short-term declines around 73.80 and 73.60 respectively.
Share
