Search ForexCrunch
  • AUD/JPY eases after a 20-pips jump to intraday high, snaps two-day downtrend.
  • US Treasury yields consolidate recent gains as traders digest Fed-led rally.
  • RBA’s Lowe sounded cautious, Aussie employment marked a big beat to already positive forecasts.
  • Risk catalysts will be the key amid a light calendar in Asia.

AUD/JPY stays firmer around 84.45, up 0.24% intraday, following a whipsaw move on the Aussie jobs report for May amid early Thursday. In doing so, the cross-currency pair consolidates the previous two day’s losses even as market sentiment dwindles amid mixed clues.

Starting with the Australia employment data, the headline Unemployment Rate slumps to 5.1% versus 5.5% expected and prior whereas the Employment Change rally past +30.0K forecasts and -30.6K previous readouts to +115.2K during May. The AUD/USD pair jumped to 84.62 after the release before dropping back to near 84.50.

Read:  Breaking: Aussie Employment report is hugly bullish, sends AUD 20 pips highe roff the bat

Before that, RBA Governor Philip Lowe crossed wires, via Reuters, during a speech at the Australian Farm Institute Conference, in Queensland. Comments from RBA Chief sounded sober as he pushed for extended easy money while citing inflation and wage growth concerns.

Read:  RBA Lowe: Aussie economy needs stimulus

On the other hand, weakness in Japan’s Foreign Bond Investment and a pullback in the US Treasury yields seem to help the AUD/JPY buyers. That said, the US 10-year Treasury yield steps back from two-week top to 1.582%, up 1.3 basis points (bps) while consolidating the heaviest jump since early March whereas S&P 500 Futures extend the previous day’s bearish momentum while losing 0.50% to 4,192 by the press time.

It’s worth noting that escalating tension between the West and China, coupled with chatters over snap elections in Japan and public outrage over holding the Olympics seem to test the AUD/JPY bulls. Additionally, fears of the Delta variant of the coronavirus (COVID-19) adds to the market’s cautious mood.

Given the end to Asia’s busy calendar, AUD/JPY moves will be dependent on the market’s risk headlines, mainly relating to monetary policy, China and covid, for fresh impulse.

Technical analysis

AUD/JPY struggles for a clear direct between an ascending support line, now resistance, from late March and a 1.5-month-old rising trend line, respectively around 84.55 and 84.00.