- AUD/JPY rises over 20 pips from session lows.
- US stock futures reach record highs, putting pressure on yen.
- Caution ahead of Jackson Hole Symposium may cap upside.
Markets offering anti-risk Japanese yen and pushing AUD/JPY cross higher alongside an uptick in the US stock futures.
The pair is trading near 75.85 at press time, representing a 0.14% gain on the day, having put in a low of 75.61 early today. That was the lowest level since Aug. 4.
Risk-on
The S&P 500 futures hit a record high of 3,402 soon before press time. Major Asian index like Japan’s Nikkei. Australia’s ASX 200 and Hong Kong’s Hang Seng are also flashing red.
Stocks are drawing bids likely due to signs of thawing in the SIno-US tensions. The Trump administration is reportedly reassuring the US companies that they can still do business with the WeChat messaging app in China. President Trump signed an executive order, banning all transactions with the Chinese app.
In addition, the coronavirus outbreak in the US is showing signs of stability and the U.S. Food & Drug Administration (FDA) has authorised the use of blood plasma from recovered patients as a treatment option. These factors seem to be underpinning the risk sentiment and pushing the Japanese yen lower.
Additional bearish pressure for the yen may be stemming from Japanese Prime Minister Shinzo Abe’s health concerns.
That said, big gains in both stocks and AUD/JPY may remain elusive as virus risks remain high in Europe and Asia and investors are likely to remain cautious ahead of Federal Reserve Chair Jerome Powell’s speech at the Kansas City Fed Jackson Hole symposium, due later this week.
Technical levels
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