This week, the AUD/JPY pair reached highs since December 2018. AUD/JPY is currently trading around the 83.00 level and economists at Westpac forecast the pair at 84.50 in the next weeks while expect AUD/JPY to end the year trading at around the 87.00 neighborhood.
“The AUD/JPY recovery from pandemic lows is not yet a year old and should extend into 2022, backed by a coordinated global upswing supporting commodity demand. This should reinforce the rebound in Australia’s domestic economy from a comparatively contained covid situation, with GDP recovering its pandemic losses by June 2021.”
“The surge in global bond yields should support AUD/JPY, given the BoJ’s commitment to ‘around’ 0% yield for the 10 year JGB. While the RBA’s dedication to loose policy is very clear, steepening yield curves globally should help A$ on crosses.”
“Multi-day/week risks look to be tilted towards 84.50, with our year-end forecast 87.”