- AUD/JPY continues to trade the 100-pip range of 76.00-75.00.
- An above-forecast Aussie jobs data is needed to lift AUD/JPY to the upper end of its recent trading range.
AUD/JPY is lacking a clear directional bias ahead of the release of the Australian jobs data, which will likely have a profound impact on market expectations for an RBA rate cut.
The currency pair has been restricted to 76.00-75.00 range since May 23. As of writing, the pair is trading largely unchanged on the day at 75.21.
The official data due at 01:30 GMT is expected to show Australia’s economy added 17.5k jobs in May, having created 28.4K jobs in April. The jobless rate is seen dropped to 5.1% from 5.2%.
It is worth noting that the Reserve Bank of Australia (RBA) cut rates by 25 basis to a new record low of 1.25% earlier this month and the markets are priced in for one more rate cut in the second half of this year.
That said, there is consensus in the market that the RBA would stand pat in July if the data due today showed a continued strength in the labor market. So, the AUD/JPY will likely pick up a bid and rise toward 76.00 if the jobs data matches or beats estimates.
However, if the employment change misses estimates by a big margin, then the market may pull forward expectations of an RBA rate cut to July, sending AUD/JPY pair below 75.00.