- AUD/JPY flatlined despite record lows in Australian government bond yields.
- Aussie 10-year yield drops below RBA’s interest rate of 1.5%.
AUD/JPY is trading in a sideways manner around 75.75 for third straight day with sellers struggling to gain an upper hand despite the losses in Australia’s 10-year government bond yield.
The benchmark yield is currently trading at 1.51% – down four basis points on the day – having hit a record low of 1.49% earlier today. The yield’s drop below the Reserve Bank of Australia’s (RBA) cash rate of 1.5% represents dovish central bank expectations.
The RBA is expected to cut rates by 25 basis points to 1.25% next month and deliver another rate cut in the second half of this year. Westpac, one of the big four Australian banks, believes the central bank will cut rates three times inn 2019.
Even so, the sell-off in the AUD/JPY pair from the April 17 high of 80.72 has come to a halt around 75.50 over the last few days. However, the Aussie bulls are struggling to capitalize on the seller exhaustion near 75.50.
Also, a break below the recent low of 75.33 cannot be ruled out as the US-China trade tensions continue to escalate. The futures on the S&P 500 are currently reporting a 0.30% drop. The anti-risk JPY, therefore, may pick up a bid during the day ahead.
Pivot levels
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