- AUD/JPY holds on to recovery gains after Aussie CPI beat expectations.
- Updates concerning China’s coronavirus keep affecting the trading sentiment.
- Japan’s Consumer Confidence Index occupies the economic calendar but markets will care more for the coronavirus news.
AUD/JPY takes the bids to 73.85 after Australia’s CPI data offered a positive surprise to the traders on early Wednesday. The pair previously bounced off multi-week low amid risk-reset based on news concerning China’s coronavirus.
Australia’s headline Consumer Price Index (CPI) beat 0.6% forecast and 0.5% prior with 0.7% on a quarterly basis while the YoY readings suggest an increase to 1.8% from 1.7% expected and the previous. Further, the RBA Trimmed Mean CPI remained unchanged on QoQ at 0.4% but crossed 1.5% forecasts to reprint 1.6% on a yearly basis.
Earlier during the day, Australia’s Westpac Leading Index rose beyond upwardly revised -0.02% to +0.05%. On the other hand, BOJ’s Summary of Opinions for the latest meeting cited the need to rely on fiscal measures while keeping bearish bias.
Market’s risk-tone improved on Tuesday as Chinese authorities showed readiness and capabilities to confront the coronavirus fears whereas experts said the virus spread to peak in ten days
However, the recently increased death toll and confirmed cases, coupled with the US shutting down the US-China airways, seem to cap the trading sentiment. While portraying the same, the US 10-year treasury yields keep it mildly positive to 1.65% whereas S&P 500 Futures register 0.13% losses to 3,275.
Traders will now have Japan’s January month Consumer Confidence Index, expected 40.8 versus 39.1 prior, on the economic calendar. Though, major attention will be given to headlines from China for a fresh direction.
Technical Analysis
Buyers will look for entry beyond 74.00 and target December 18 low near 74.85 during the fresh recovery. Until then, the risk of the pair’s declines to 73.00 can’t be ruled out.
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