- AUD/JPY drops as USD’s broad-based recovery weighs over AUD/USD.
- Above-forecast China PPI and CPI data fail to inspire the AUD bulls.
Signs of easing in China’s factory deflation is failing to put a bid under the China-sensitive Aussie dollar. The AUD/JPY pair remains on the offer near session lows below 80.35, representing a 0.5% drop on the day.
As measured by the Producer Price Index, China’s factory gate prices fell 0.4% year-on-year in December, following November’s 1.5% drop and beating the forecast of a 0.8% contraction.
While the pace of price decline eased in December, the deflation persisted for the 10th straight month.
The Consumer Price Index rose 0.7% month-on-month in December, marking a bigger-than-expected rebound from November’s 0.6% contraction.
So far, however, the China data and the upbeat Aussie Retail Sales released early Monday have failed to impress the Aussie bulls. The rising US Treasury yields and the oversold bounce in the US dollar are weighing over the AUD/USD pair and keeping AUD/JPY under pressure.
According to some analysts, a sustained rise in treasury yields could cause a correction in global stocks. In that case, the AUD/JPY pair could take a beating.
Technical levels
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