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  • AUD/JPY stays depressed near the lowest since seven weeks after RBA’s Deputy Governor Guy Debelle’s speech.
  • RBA board member suggests market intervention is a policy option.
  • Virus woes, Sino-American tussle also weigh on the quote.

AUD/JPY slumps from 75.73 to 75.45 following the downbeat comments from RBA policymaker amid Tuesday’s Asian session. Other than Debelle’s hint to foreign exchange intervention, challenges to the risk-tone sentiment, emanating from the coronavirus (COVID-19) and US-China tension, also please the pair bears near the lowest since August 03.

During his speech on “The Australian Economy and Monetary Policy” at the Australian Industry Group conference, RBA’s Guy Debelle said that the board continues to assess other monetary policy options. The policymaker also cited bond purchases and foreign exchange intervention as available options.

Read: RBA’s Debelle: RBA is assessing currency market intervention

It should be noted that the pair marked the biggest losses in two weeks the previous day as global markets praised the risk-aversion wave. Increasing chatter over the national lockdowns in Europe and the UK, backed by the recent surge in the COVID-19 numbers, could be cited as the main catalyst for the traders’ rush to risk-safety.

Additionally, the tension between the US and China adds pressure on the AUD/JPY as China is the largest customer of Australia. Recently, the American Secretary of State Mike Pompeo thanked the UK, Germany, and France to mark the joint rejection of China’s claims in the South China Sea at the United Nations (UN). The event intensifies the rivalry among the world’s two largest economies.

Even so, S&P 500 Futures snaps a four-day losing streak while gaining 0.23% to 3,282 as we write.

Looking forward, off in Japan may restrict the pair’s moves but risk aversion can keep the bears happy.

Technical analysis

The pair’s break of the 50-day SMA dragged to the lowest since August 03 while bearish MACD signals indicate further downside.