AUD/JPY: Mild bid around 50-day SMA as Japanese CPI/FinMin Aso entertain Tokyo traders after the holiday

• Japanese traders return from a day’s break to markets with CPI on Friday.
• Risk sentiments could gain major attention on lack of data.

The Japanese Yen (JPY) is taking the bids near 78.70 versus the Australian Dollar (AUD) as Tokyo opens after a day’s break on Friday. The pair recently benefited from mixed consumer price index (CPI) numbers from Japan and comments from the Japanese Finance Minister Taro Aso. Although there are no major economic data remain left for publishing from either Australia or Japan, risk sentiment could be observed for fresh impulse.

The February month National CPI (YoY) from Japan lagged behind 0.3% market consensus to reprint 0.2% prior but the National CPI ex-fresh food (YoY) crossed 0.6% forecast with +0.7% increase against +0.8% earlier.

Comments from Finance Minister Taro Aso also fuelled liquidity into the AUD/JPY pair past-CPI release. Mr. Aso was quoted saying that Japan’s economy is in a moderate recovery and the sales tax hike will go ahead as planned for October.

The quote declined on Thursday as the absence of Japanese traders and overall strength of the US Dollar (USD) lured buyers but safe-haven nature of the JPY dragged the AUD/JPY down.

Looking forward, risk sentiment surrounding the US-China trade deal, Brexit and recently erupted US-North Korea rift should be observed in order to determine immediate moves of the pair.

While news are on rounds that the US President Donald Trump is pushing his team to convince China over a trade deal soon, it was also discussed that North Korea has demanded the US to remove its strategic weapons off Guam and Hawaii. Additionally, the EU lawmakers offered an unconditional Brexit deadline extension till April 12 that can be stretched to May 22 for which Theresa May will reach Britain to gain support for her plan in parliament.

AUD/JPY Technical Analysis

50-day simple moving average (SMA) figure of 78.70 acts as immediate support, a break of which can recall 78.40 and 78.00 but an upward sloping trend-line since January 07 can limit further declines around 77.70.

On the upside, 79.40 can please short-term buyers ahead of challenging them with 100-day SMA figure of 79.70, a break of which may print 80.00 and then push the bulls toward 200-day SMA level of 80.45.