CFD Trading Rate Australian Dollar vs Japanese Yen (AUDJPY)

• AUD/JPY rebounded due to possible positive sentiment in the market after the Fed decided to maintain the current interest rate.
• The Japanese Yen experienced an increase during the morning hours in New Zealand driven by another possible government intervention.
• Australian Bureau of Statistics reported a Trade Balance (MoM) with a surplus lower than expected in April.

AUD/JPY edges higher on Thursday after paring daily losses. The Japanese Yen (JPY) saw an uptick during the morning in New Zealand driven by another possible government intervention, marking the second occurrence this week. However, it later relinquished its gains following the release of the Bank of Japan (BoJ) Board members' insights into the monetary policy outlook during Thursday's session, as documented in the BoJ Minutes from the March meeting.

According to Reuters, a member mentioned that the economy's response to a short-term rate increase to approximately 0.1% is expected to be minimal. Several members expressed the belief that long-term rates ought to be primarily determined by market forces. Additionally, a few members suggested that the Bank of Japan should eventually consider decreasing its bond purchasing and scaling down its bond holdings.

The Australian Dollar (AUD) receives support, potentially buoyed by the prevailing positive sentiment in the market following the US Federal Reserve's decision to maintain interest rates at 5.25%-5.50% during Wednesday's policy meeting. Furthermore, Fed Chair Jerome Powell dismissed the likelihood of a further rate hike, contributing to the positive outlook. Nevertheless, the anticipation of interest rate hikes in Australia later this year remains on the table.

Australia’s Trade Balance and Building Permits data showed weaker-than-expected readings, which could contribute to downward pressure on the Australian Dollar. These disappointing readings could dampen the hawkish sentiment surrounding the Reserve Bank of Australia's (RBA)'s stance on maintaining higher interest rates throughout 2024.

Daily Digest Market Movers: AUD/JPY gains ground due to positive market sentiment

• Australia’s Trade Balance (MoM) showed a surplus of 5,024 million in April. The market was expecting an increase to 7,370 million from the previous 7,370 million.
• The Building Permits released by the Australian Bureau of Statistics shows the number of permits for new construction projects rose by 1.9%, falling short of the expected 3.0% in March. The previous month’s reading was -1.9%.
• On Thursday, the ASX 200 Index saw a modest increase following the uptick were heavyweight financial firms. This benchmark index recovers some of the losses from the previous session, following the Federal Reserve's decision to maintain interest rates.
• On Wednesday, the AiG Australian Industry Index declined in April indicating prevailing contractionary conditions for the past twenty-four months. Additionally, the seasonally adjusted Australian Retail Sales released on Tuesday showed a drop in March, compared to the expected increase and the previous growth.
• As reported by the Financial Review, ANZ anticipates that the RBA will commence cutting interest rates in November, following last week’s stronger-than-expected inflation data. In a similar vein, Australia's largest mortgage lender, Commonwealth Bank, has adjusted its forecast for the timing of the first interest rate cut by the RBA. They are now projecting only one cut in November.
• Masato Kanda, Japan's top currency diplomat, refrained from confirming whether Japanese authorities had indeed intervened early Thursday in response to a significant strengthening of the JPY. Kanda mentioned that intervention data will be disclosed at the end of the month.
• Japan’s Retail Trade increased by 1.2% year-over-year in March, which was lower than the expected increase of 2.5% and the previous increase of 4.7%. The seasonally adjusted Retail Trade (MoM) decreased by 1.2%, against the expected rise of 0.6%.
• According to Reuters, the Sankei newspaper reported on Tuesday that Japan is considering implementing tax breaks for repatriation of corporate profits into the Yen. This measure may potentially be included in the annual mid-year policy blueprint.

Technical Analysis: AUD/JPY rises to near the psychological level of 102.00

The AUD/JPY traded around 102.00 on Thursday, remaining below the lower boundary of a rising wedge pattern on the daily chart. Traders may await clear direction from the 14-day Relative Strength Index (RSI), which is still above the 50-level.

The key support for the AUD/JPY pair is seen at the lower boundary of the ascending channel around the psychological level of 100.00. A break below this level could strengthen the bearish bias and put pressure on the currency cross to navigate the region around April’s low at 97.78.

Immediate resistance is observed at the lower boundary of the wedge around the psychological level of 103.00. A rebound back into the ascending wedge could potentially improve the bullish bias and push the AUD/JPY pair toward the psychological level of 105.00, followed by the upper boundary of the wedge.

AUD/JPY: Daily Chart

• The Australian Dollar loses ground after the release of the weaker AiG Industry Index on Wednesday.
• The Australian Industry Index indicated prevailing contractionary conditions for the past twenty-four months.
• Traders will monitor for any potential Japanese intervention, following recent reports suggesting Tokyo's involvement in the currency market.

AUD/JPY extends its losing streak for the third consecutive session. The Australian Dollar (AUD) faced pressure following the release of the AiG Industry Index on Wednesday, a leading indicator measuring private business activity in Australia, which continued its decline in March.

The softer Aussie Retail Sales released on Tuesday could potentially impact the Reserve Bank of Australia's (RBA) hawkish stance on interest rate trajectory. However, higher-than-expected domestic inflation data released last week raised expectations that the RBA may delay interest rate cuts. The central bank is scheduled to meet next week, and it is widely anticipated to maintain interest rates at the current level of 4.35%

In Japan, market participants are closely monitoring for potential intervention following reports of Tokyo's involvement in the currency market on Monday, which boosted the Japanese Yen (JPY), according to Reuters. Additionally, expectations for a sustained significant interest rate differential between Japan and other nations suggest that the trajectory of the JPY is biased toward further depreciation.

The Bank of Japan (BoJ) is set to release its Monetary Policy Meeting Minutes on Thursday. These minutes provide insight into economic developments in Japan following the actual meeting. Changes in this report can influence JPY volatility.

Daily Digest Market Movers: AUD/JPY edges lower after weaker Aussie data

• In April, the AiG Australian Industry Index declined by 3.6 points to reach -8.9 points, indicating prevailing contractionary conditions for the past twenty-four months. The previous reading was -5.3 in March.
• The benchmark ASX 200 opened lower on Wednesday, with all 11 sectors in the red. This decline followed hot US labor data that unsettled Wall Street, sparking concerns that persistent inflation may prompt the US Federal Reserve (Fed) to maintain higher interest rates for an extended period.
• As reported by the Financial Review, ANZ anticipates that the RBA will commence cutting interest rates in November, following last week’s stronger-than-expected inflation data. In a similar vein, Australia's largest mortgage lender, Commonwealth Bank, has adjusted its forecast for the timing of the first interest rate cut by the RBA. They are now projecting only one cut in November.
• The seasonally adjusted Australian Retail Sales released on Tuesday, showed a drop in March, compared to the expected increase and the previous growth.
• Japan’s Retail Trade increased by 1.2% year-over-year in March, which was lower than the expected increase of 2.5% and the previous increase of 4.7%. The seasonally adjusted Retail Trade (MoM) decreased by 1.2%, against the expected rise of 0.6%.
• Masato Kanda, Japan's senior currency diplomat, made pointed comments regarding the currency's impact on import prices, emphasizing its significant influence. He highlighted the readiness of authorities to take action around the clock to address currency-related matters, as per a Reuters report.
• BoJ Governor Kazuo Ueda provided insights into the central bank's decision to maintain the status quo during the post-policy meeting press conference on Friday. Ueda outlined that the BoJ will adjust the degree of monetary easing if the underlying inflation rate rises.

Technical Analysis: AUD/JPY hovers around the psychological level of 102.00

The AUD/JPY trades around 102.10 on Wednesday, breaking below the lower boundary of a rising wedge pattern on the daily chart, which typically indicates a bearish reversal. This decline could weaken bullish sentiment; however, traders may await confirmation from the 14-day Relative Strength Index (RSI), which is still above the 50-level.

Immediate resistance is observed at the lower boundary of the wedge around the psychological level of 103.00. A rebound back into the ascending wedge could potentially improve the bullish sentiment and push the AUD/JPY pair toward the psychological level of 105.00, coinciding with the upper boundary of the wedge.

On the downside, immediate support for the AUD/JPY pair is seen at the psychological level of 102.00, followed by the nine-day Exponential Moving Average (EMA) at 101.56.

AUD/JPY: Daily Chart

• AUD/JPY declines 0.77% amid reactions to recent Bank of Japan interventions.
• Key support levels are at 101.35 and the April 25 low of 100.77, ahead of 100.00.
• Should the pair climb above 102.00, it might aim to retest resistance at 102.84 and potentially push towards the year-to-date high of 104.95.

The Aussie Dollar extends its losses against the Japanese Yen for the second straight day, following an intervention by the Bank of Japan (BoJ) on Monday, which kept the pair seesawing in the 101.37/104.95 range. Late in the North American session, the AUD/JPY trades at 102.18, down 0.77%.

AUD/JPY Price Analysis: Technical outlook

The AUD/JPY daily chart suggests the pair is upward biased despite retreating below the 103.00 figure. Subsequent losses are seen below the Tenkan and Kijun-Sen levels at 101.35, followed by the April 25 low at 100.77. A breach of the latter will expose the 100.00 threshold, followed by the April 22 low at 99.05.

On the other hand, the uptrend might resume if buyers hold the AUD/JPY exchange rate above 102.00. The first resistance would be the 2014 high at 102.84, followed by the 103.00 mark. Once cleared, the next stop would be the year-to-date (YTD) high at 104.95.

AUD/JPY Price Action – Daily Chart

• The Australian Dollar loses ground after the release of lower-than-expected Retail Sales.
• The Australian Retail Sales for March took an unexpected downturn, contrasting with the anticipated rise.
• Market participants will closely monitor for any potential Japanese intervention on Tuesday.

AUD/JPY edges lower on Monday after the release of the lower-than-expected Aussie Retail Sales, a leading indicator that has a direct correlation with inflation and growth prospects, could impact the RBA’s hawkish stance on interest rate trajectory. However, the Australian Dollar (AUD) strengthened as higher-than-expected domestic inflation data raised expectations that the Reserve Bank of Australia (RBA) may not cut interest rates soon.

Australia's largest mortgage lender, Commonwealth Bank has adjusted its forecast for the timing of the first interest rate cut by the RBA. They are now projecting only one cut in November, as reported by the Financial Review. CBA anticipates that the Reserve Bank of Australia' could decrease the cash rate to 4.1% from 4.35% this year, with a more substantial drop to 3.1% by 2025. Gareth Aird, CBA's head of Australian economics, stated, "We have penciled in one 25 basis point rate cut in each quarter over 2025."

On the Japanese side, market participants will remain vigilant for potential Japanese intervention on Tuesday, following reports of Tokyo's involvement in the currency market on Monday, which propelled the Japanese Yen (JPY), according to Reuters. Lower-than-expected domestic Retail Trade data released on Tuesday support the dovish stance of the Bank of Japan (BOJ). Additionally, expectations for a sustained significant interest rate differential between Japan and other nations suggest that the trajectory of the JPY is biased toward further depreciation.

Daily Digest Market Movers: AUD/JPY edges lower after softer Retail Sales

• The seasonally adjusted Australian Retail Sales dropped 0.4% MoM in March, compared to the expected increase of 0.2% and the previous growth of 0.3%.
• China’s NBS Manufacturing Purchasing Managers Index (PMI) fell to 50.4 in April, against the 50.8 prior. The reading was better than the expected reading of 50.3. Non-manufacturing PMI declined to 51.2, as expected. The previous reading was 53.0 in March.
• Japan’s Retail Trade increased by 1.2% year-over-year in March, which was lower than the expected increase of 2.5% and the previous increase of 4.7%. The seasonally adjusted Retail Trade (MoM) decreased by 1.2%, against the expected rise of 0.6%.
• Australian shares kicked off Tuesday with little change, as investors paused ahead of the upcoming US Federal Reserve rates decision on Wednesday. Among the 11 sectors, only materials showed gains, while the rest remained relatively unchanged.
• Masato Kanda, Japan's senior currency diplomat, made pointed comments regarding the currency's impact on import prices, emphasizing its significant influence. He highlighted the readiness of authorities to take action around the clock to address currency-related matters, as per a Reuters report.
• BoJ Governor Kazuo Ueda provided insights into the central bank's decision to maintain the status quo during the post-policy meeting press conference on Friday. Ueda outlined that the BoJ will adjust the degree of monetary easing if the underlying inflation rate rises. Additionally, He emphasized that easy financial conditions will be maintained for the time being, indicating the BoJ's commitment to supporting economic recovery and stability through accommodative monetary measures.

Technical Analysis: AUD/JPY maintains position above 102.00

The AUD/JPY traded around 102.70 on Tuesday, hovering above the lower boundary of the ascending triangle on a daily chart. Additionally, the 14-day Relative Strength Index (RSI) is above the 50-level, reinforcing the bullish sentiment.

The immediate resistance is observed at the psychological level of 105.00, coinciding with the upper boundary of the triangle. A breakthrough above this area could propel the AUD/JPY cross to test the highest level of 105.43 recorded in April 2013.

On the downside, immediate support for the AUD/JPY pair might be encountered at the psychological level of 102.00, aligning with the lower boundary of the triangle. If the pair breaches below this level, it could lead to a further decline toward the nine-day Exponential Moving Average (EMA) at 101.51.

AUD/JPY: Daily Chart

• The daily RSI suggests consistent buying momentum, with a slight dip indicating the possibility of a short-term correction.
• The hourly RSI and MACD readings suggest mounting selling pressure in recent transactions.

The AUD/JPY trades at 102.43, demonstrating a pronounced bullish inclination despite Monday’s sharp losses. Indicators took a big hit and suggests that despite the bullish command, sellers are gaining ground.

On the daily chart, the Relative Strength Index (RSI) is seen trending within the overbought terrain, suggesting that buying activity has dominated the market action. A recent dip from overbought territory to 66 indicates potential for a short-term correction in the upcoming sessions. Meanwhile, the Moving Average Convergence Divergence (MACD) maintains flat green bars, signifying stable positive momentum.

AUD/JPY daily chart

Shifting to the hourly chart, the RSI readings reveal a contrasting scenario. The hourly RSI readings are trending in the negative territory, demonstrating that selling activity had a certain control in the latest trading hours. Moreover, the hourly MACD marks flat red bars, underlining a steady negative momentum.

AUD/JPY hourly chart

Observing the broader perspective, the AUD/JPY currently occupies a position above the 20, 100, and 200-day SMA. This stance underscores the prevailing bullish market sentiment in both short-term and long-term scenarios. In conclusion, while the daily indicators reflect an overall bullish sentiment, recent hourly readings suggest the potential for a short-term correction. Traders should monitor these contrasting signals closely as there might be a shift in the momentum in favor of the sellers and they might reclaim the 20-day SMA.

• The Australian Dollar surges driven by growing hawkish sentiment surrounding RBA, following the hot CPI data.
• Judo Bank chief economic adviser Warren Hogan predicts that the RBA might increase the cash rate three times in 2024.
• The safe-haven JPY loses ground due to the uncertainty surrounding the BoJ's rate outlook.

AUD/JPY continues its winning streak for the sixth successive session on Monday, hovering around 104.50, a level not seen since April 2013. The persistent upward momentum of the AUD/JPY pair is driven by the increasing hawkish sentiment surrounding the Reserve Bank of Australia (RBA), following the release of last week's Consumer Price Index (CPI) inflation data.

The unexpected surge in inflation figures prompted economists to revise their earlier forecasts significantly. Warren Hogan, chief economic adviser at Judo Bank, told “The Australian Financial Review” his anticipation of the central bank raising the cash rate three times this year, reaching 5.1%, with the first hike likely in August. Investors now look forward to Retail Sales for March on Tuesday, which gauges Australia’s consumer spending. It has a significant bearing on Australia’s inflation and GDP.

The Japanese Yen (JPY) tumbled to new multi-decade lows following the Bank of Japan's (BoJ) decision to maintain policy settings unchanged on Friday. Uncertainty surrounding the BoJ's rate outlook, indications of cooling inflation in Japan, and a generally optimistic sentiment in equity markets are pivotal factors eroding the safe-haven appeal of the JPY.

Furthermore, expectations for a prolonged wide interest rate differential between Japan and the other countries imply that the JPY's trajectory is biased towards further decline. With Japanese markets closed on Monday for Showa Day, market dynamics may see limited shifts in the absence of trading activity.

Daily Digest Market Movers: AUD/JPY rises on increasing hawkish sentiment surrounding RBA

• Australia's stock market experienced a robust rally on Monday, inspired by a strong performance on Wall Street. The ASX 200 Index recovered some ground lost on Friday, with all 11 industry sectors trading in positive territory. Friday's rally on Wall Street was fueled by impressive earnings reports from tech giants such as Microsoft and Google's parent company, Alphabet, propelling the Nasdaq up by more than 2%
• On Friday, TD Securities' revision suggests a postponement of the anticipated rate cut by the Reserve Bank of Australia (RBA) until February 2025, shifting from the previously anticipated date in November. This development strengthens the Australian Dollar (AUD) and, in turn, bolsters the AUD/JPY pair.
• BoJ Governor Kazuo Ueda provided insights into the central bank's decision to maintain the status quo during the post-policy meeting press conference on Friday. Ueda outlined that the BoJ will adjust the degree of monetary easing if the underlying inflation rate rises. Additionally, He emphasized that easy financial conditions will be maintained for the time being, indicating the BoJ's commitment to supporting economic recovery and stability through accommodative monetary measures.
• Tokyo Consumer Price Index rose 1.8% YoY in April, well below the previous print of 2.6%. Markets were broadly expecting Tokyo inflation to hold steady over the period. The Core CPI fell sharply to 1.6% year-on-year, marking its lowest level since March 2022 and falling well below forecasts of 2.2%.
• On Friday, a report from Reuters said that the Bank of Japan (BOJ) is expected to project that inflation will remain close to its 2% target in the coming years and signal its preparedness to raise interest rates from their near-zero levels. This stance by the BOJ is aimed at preventing Yen depreciation and discouraging market participants from pushing the currency to fresh 34-year lows.
• Australia’s Consumer Price Index (CPI) increased to an all-time high of 137.40 points in the first quarter of 2024 from 136.10 points in the fourth quarter of 2023.
• As reported by the Japan Times, the percentage of Japanese companies aiming to raise their pay scales has surged to 70.7%, representing a notable increase of 6.3 percentage points compared to the prior year. Furthermore, the number of companies intending to implement pay-scale hikes and regular pay increases totaling 5% or higher has nearly doubled from the previous year, reaching 36.5%. This trend holds the potential to enhance the purchasing power of individuals, potentially leading to an uptick in consumer prices.

Technical Analysis: AUD/JPY surges to the major level of 104.50

The AUD/JPY trades around 104.50 on Monday, surpassing the upper boundary of the daily ascending channel. Additionally, the 14-day Relative Strength Index (RSI) is trending above the 50-level, strengthening the bullish sentiment. The immediate resistance is seen at the psychological level of 105.00. A breakthrough above this level could support the cross to test the highest level of 105.43 recorded in April 2013.

On the downside, immediate support for the AUD/JPY pair could be found at the psychological level of 104.00. If the pair breaches below this level, the AUD/JPY cross could lead to a further decline toward the nine-day Exponential Moving Average (EMA) at 101.59, aligned with the lower boundary of the ascending channel and a major level of 101.50.

AUD/JPY: Daily Chart

• AUD/JPY extends its winning streak after the lower-than-expected Tokyo CPI data released on Friday.
• The Australian 10-year Government Bond Yield has reached a 21-week high of 4.59%.
• Tokyo CPI has fallen below the Bank of Japan's (BoJ) 2% target for the second time this year.

AUD/JPY extends its winning streak for the fifth consecutive session on Friday. The Australian Dollar (AUD) finds support from increasing bids for a hawkish stance for the Reserve Bank of Australia’s (RBA) monetary policy. The revision by TD Securities indicates a delay in the expected rate cut by the Reserve Bank of Australia (RBA) until February 2025 instead of November. This boosts the Australian Dollar (AUD) and consequently supports the AUD/JPY cross.

Australia’s Consumer Price Index (CPI) data on Wednesday, surpassing expectations, is also playing a role in an increase in Australian government bond yields as traders price out expectations regarding interest rate cuts by the RBA in 2024. The Australian 10-year Government Bond Yield has reached a 21-week high of 4.59%, indicating a significant upward trend.

The Japanese Yen (JPY) depreciated following the release of Japan's Tokyo Consumer Price Index (CPI), which came in well below expectations early Friday. This print marks the second time this year that inflation has fallen below the Bank of Japan's (BoJ) 2% target, reducing pressure on the central bank to raise interest rates again. As a result, market sentiment is shifting towards the expectation that the BoJ will abstain from implementing rate hikes during its meeting on Friday.

Daily Digest Market Movers: AUD/JPY gains ground after weaker Tokyo’s CPI data

• Tokyo Consumer Price Index rose 1.8% YoY in April, well below the previous print of 2.6%. Markets were broadly expecting Tokyo inflation to hold steady over the period. The Core CPI fell sharply to 1.6% year-on-year, marking its lowest level since March 2022 and falling well below forecasts of 2.2%.
• SocGen's assessment of the potential for USD/JPY to test the Japanese Ministry of Finance's intervention limits due to persistent US rate expectations and recent market dynamics suggests a significant focus on the interplay between US economic data and currency movements.
• On Friday, a report from Reuters said that the Bank of Japan (BOJ) is expected to project that inflation will remain close to its 2% target in the coming years and signal its preparedness to raise interest rates from their near-zero levels. This stance by the BOJ is aimed at preventing yen depreciation and discouraging market participants from pushing the currency to fresh 34-year lows.
• Jiji news agency reported on Thursday that the Bank of Japan (BOJ) might reduce its bond purchases appears to be exerting a more significant influence on the market sentiment compared to the lower-than-expected Tokyo Consumer Price Index (CPI) data released today.
• According to Luci Ellis, Westpac's chief economist and former Assistant Governor (Economic) at the Reserve Bank of Australia, inflation slightly surpassed expectations in the March quarter. They anticipate the Board will maintain interest rates in May and have revised the projected date for the initial rate reduction from September to November this year.
• According to analysts at Barrenjoey Capital Partners, a leading Australian investment banking firm, advised to utilize the trimmed mean to rank Australia's inflation. Australia's six-month annualized rate of trimmed mean inflation, standing at 3.6%, is notably the highest worldwide, surpassing even the United States' 3.2% six-month annualized rate of trimmed mean inflation.
• Australia’s Consumer Price Index (CPI) rose by 1.0% QoQ in the first quarter of 2024, against the expected 0.8% and 0.6% prior. CPI (YoY) increased by 3.6% compared to the forecast of 3.4% for Q1 and 4.1% prior. Australia’s Monthly Consumer Price Index (YoY) rose by 3.5% in March, against the market expectations and the previous reading of 3.4%.
• According to the Japan Times, the proportion of Japanese companies intending to increase their pay scales reached 70.7%, marking a rise of 6.3 percentage points from the previous year. Additionally, the number of companies planning to implement pay-scale hikes and regular pay increases totaling 5% or more amounted to 36.5%, nearly doubling from the previous year. This could provide support for the Yen.

Technical Analysis: AUD/JPY hovers around the major level of 101.50

The AUD/JPY trades around 101.50 on Friday, testing the upper boundary of the daily ascending channel, trading around a fresh five-month high of 101.66. Additionally, the 14-day Relative Strength Index (RSI) is trending above the 50-level, strengthening the bullish sentiment. The immediate resistance is seen at the psychological level of 102.00.

On the downside, immediate support for the AUD/JPY pair could be found at the psychological level of 101.00. If the pair breaches below this level, it suggests a bearish sentiment may prevail and might lead the AUD/JPY cross to a further decline toward the psychological level of 100.00, followed by the 21-day Exponential Moving Average (EMA) at the level of 99.87. Further depreciation will likely test the lower boundary of the ascending channel around the level of 99.00.

AUD/JPY: Daily Chart

• The daily RSI for AUD/JPY reveals that the bulls are in charge, approaching overbought conditions.
• Despite the hourly MACD indicating a short-term dip, the RSI highlights the buyers'  dominance.
• As the cross jumped to multi-year highs, the buyers might eventually run out of gas.

The AUD/JPY exhibits substantial bullish momentum, standing at the 101.39 level and showing an encouraging 0.54% rally. The dominance of bullish trends is evident but a healthy correction might be necessary for the buyers to conquer additional ground.

On the daily chart, the Relative Strength Index (RSI) reveals a positive momentum, with the latest reading nearing the overbought condition. The Moving Average Convergence Divergence (MACD) supports this, printing green bars.

AUD/JPY daily chart

Shifting the attention to the hourly chart, the MACD paints a different picture with its red bars, signaling that in this timeframe, buyers might have already become exhausted. However, the RSI readings suggest steady, positive momentum with figures hovering above 50, apart from a brief dip to 48.

AUD/JPY hourly chart

The AUD/JPY also demonstrates a bullish stance in the broader picture as it positions itself above the 20, 100, and 200-day Simple Moving Averages (SMA). So all signals points to a clear bullish stance, but traders should be alert that if daily indicators reach overbought conditions, the pair may see some healthy downside to consolidate gains.

• AUD/JPY continues its winning streak after the stronger Australian CPI was released on Wednesday.
• Australia’s 10-year government bond yield has surged to 4.49% near five-month highs on waning expectations of the RBA rate cuts.
• The Japanese Yen continues to depreciate as the BoJ is expected to abstain from implementing rate hikes on Friday.

AUD/JPY edges higher for the fourth consecutive session on Thursday. The Australian Dollar (AUD) found support following the release of Australian Consumer Price Index (CPI) data on Wednesday, which exceeded expectations. This development hints at a potentially hawkish stance for the Reserve Bank of Australia’s (RBA) monetary policy, bolstering the AUD and subsequently supporting the AUD/JPY pair.

Australia’s 10-year government bond yield has surged above 4.49%, nearing five-month highs, as robust domestic inflation figures have strengthened expectations of the RBA delaying interest rate cuts. Moreover, easing tensions in the Middle East has fostered a positive market sentiment, benefiting risk-sensitive currencies like the AUD.

The Japanese Yen (JPY) continues to depreciate ahead of the upcoming release of the Bank of Japan’s (BoJ) Monetary Policy Statement scheduled for Friday. It's widely anticipated that the BoJ will abstain from implementing rate hikes in this meeting.

According to reports from Nikkei, the BoJ is likely to deliberate on the "impact of accelerating Yen depreciation," indicating that the central bank may intervene in the foreign exchange markets if the JPY weakens.

Daily Digest Market Movers: AUD/JPY appreciates on hawkish sentiment surrounding RBA

• According to Luci Ellis, Westpac's chief economist and former Assistant Governor (Economic) at the Reserve Bank of Australia, inflation slightly surpassed expectations in the March quarter. They anticipate the Board will maintain interest rates in May and have revised the projected date for the initial rate reduction from September to November this year.
• Australia’s Consumer Price Index (CPI) rose by 1.0% QoQ in the first quarter of 2024, against the expected 0.8% and 0.6% prior. CPI (YoY) increased by 3.6% compared to the forecasted 3.4% for Q1 and 4.1% prior.
• Australia’s Monthly Consumer Price Index (YoY) rose by 3.5% in March, against the market expectations and the previous reading of 3.4%.
• On Tuesday, Australia's Judo Bank Composite Purchasing Managers Index (PMI) surged to a 24-month high, indicating an improvement from the previous month. While the Manufacturing PMI reached an eight-month high, the Services PMI declined to a two-month low. This has bolstered the hawkish sentiment for the RBA’s stance on its interest rate trajectory.
• According to the Japan Times, the proportion of Japanese companies intending to increase their pay scales reached 70.7%, marking a rise of 6.3 percentage points from the previous year. Additionally, the number of companies planning to implement pay-scale hikes and regular pay increases totaling 5% or more amounted to 36.5%, nearly doubling from the previous year. This could provide support for the Yen.
• Reuters reported that Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Tuesday that the central bank would raise interest rates again if trend inflation accelerates toward its 2% target, in line with its forecast. Ueda also said that it is hard to predict in advance the ideal timeframe for the Bank of Japan (BoJ) to gather sufficient data before considering a policy change.
• The Tokyo Consumer Price Index (CPI) for the year ended April is scheduled to be released during the early Friday session in Japan.

Technical Analysis: AUD/JPY moves above the psychological level of 101.00

The AUD/JPY trades around 101.10 on Thursday, edging towards the upper boundary of the daily ascending channel after surpassing April’s high of 100.81. Moreover, the 14-day Relative Strength Index (RSI) is trending above the 50-level, indicating a bullish sentiment. The immediate resistance is seen at the major level of 101.50.

In case of a downside movement, immediate support for the AUD/JPY pair could be found at the psychological level of 101.00, followed by the major support level of 100.81. A breach below this level might lead to a further decline toward the support level of 99.65, followed by the lower boundary of the ascending channel around the level of 99.00.

AUD/JPY: Daily Chart

• The daily RSI of the AUD/JPY continues its uphill journey, nearing overbought territory, amplifying buying traction.
• Hourly indicators are also strong, with no signs of bears.
• A healthy correction shouldn't be ruled out.

The AUD/JPY market showcases an increasingly bullish trend. The cross stabilized at 100.89 on Wednesday, after rallying to a high at 101.12, its highest since 2014. The general market interest leans towards the buyers as the pair follows an upward trend and surpasses significant levels. However, as the pair gained nearly 1.50% in the last sessions, the cross might be poised for a correction.

On the daily chart, the Relative Strength Index (RSI) of the AUD/JPY pair continues its upward trajectory nearing overbought territory. The Moving Average Convergence Divergence (MACD) also supports the buyers, as it prints a fresh green bar.

AUD/JPY daily chart

Switching the focus to the hourly chart, the hourly Relative Strength Index (RSI) displays a generally increasing trend, pointing toward positive short-term momentum. In addition, the MACD portrays decreasing red bars, denoting the declining momentum of the sellers in the short-term trading hours.

AUD/JPY hourly chart

In the broader outlook, the AUD/JPY indicates a bullish trend, given its current position above the 20, 100, and 200-day Simple Moving Average (SMA). SMAs serve as technical indicators for analyzing price trends by smoothing out price fluctuations. The pair's stance above all three SMAs suggests a strong stance from the bull in the short and long-term perspectives. In addition, the pair rallying to multi-year highs suggests that the bulls are clearly in command, but traders shouldn't be ruled out as indicators might run out of steam.

• AUD/JPY gains ground due to the stronger-than-expected Australian consumer inflation data.
• The ASX 200 Index appreciates, primarily fueled by advancements in technology and healthcare stocks.
• The Japanese Yen faces challenges as the yield gap widens between Japan and other major countries.

AUD/JPY extends its winning streak for the third successive day after paring intraday losses on Wednesday. Additionally, the Australian Bureau of Statistics (ABS) released the better-than-expected Consumer Price Index (CPI) data on Wednesday, guiding the outlook for the Reserve Bank of Australia’s (RBA) monetary policy. This has bolstered the Australian Dollar (AUD), consequently, underpinning the AUD/JPY cross.

The Australian Dollar (AUD) receives upward support due to the improved risk appetite, along with the higher ASX 200 Index, particularly driven by gains in technology and healthcare stocks. Australian shares followed the positive trend seen on Wall Street, buoyed by robust corporate earnings reports, which have lifted market sentiment. Additionally, diminishing tensions in the Middle East have contributed to a positive market atmosphere.

The Japanese Yen (JPY) encounters difficulties due to the widening yield gap between Japan and numerous other major countries, leading traders to borrow JPY and seek higher yields in other assets. Despite this trend, intervention by Japanese authorities to buy Yen has not yet occurred. With the Bank of Japan (BoJ) commencing its two-day policy meeting on Thursday, Tokyo may refrain from intervening in the currency market until at least next week.

Daily Digest Market Movers: AUD/JPY appreciates on stronger CPI, risk-on mood

• Australia’s Consumer Price Index (CPI) rose by 1.0% QoQ in the first quarter of 2024, against the expected 0.8% and 0.6% prior. CPI (YoY) increased by 3.6% compared to the forecasted 3.4% for Q1 and 4.1% prior.
• Australia’s Monthly Consumer Price Index (YoY) rose by 3.5% in March, against the market expectations and the previous reading of 3.4%.
• On Tuesday, Australia's Judo Bank Composite Purchasing Managers Index (PMI) showed a surge to a 24-month high of 53.6 in April, marking an improvement from the previous month's 53.3. Manufacturing PMI rose to an eight-month high of 49.9 in April, compared to March's 47.3. Services PMI declined to a 2-month low of 54.2 compared to the previous reading of 54.4.
• Japan’s Jibun Bank Manufacturing PMI improved to 49.9 in April as data showed on Tuesday, compared to the expected reading of 48.0 and 48.2 prior. Meanwhile, Services PMI rose to 54.6 from the previous reading of 54.1.
• Reuters reported that Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Tuesday that the central bank would raise interest rates again if trend inflation accelerates toward its 2% target, in line with its forecast. Ueda also said that it is hard to predict in advance the ideal timeframe for the Bank of Japan (BoJ) to gather sufficient data before considering a policy change.
• Japan's Finance Minister Shunichi Suzuki stated on Tuesday that last week's trilateral meeting with his counterparts from the US and South Korea likely established a foundation for Tokyo to undertake necessary measures in the foreign exchange market, according to a Reuters report.
• The China Securities Journal reported on Tuesday that the People's Bank of China (PBoC) will decrease the Medium-term Lending Facility (MLF) rate, aiming to lower funding costs. The next MLF rate setting is scheduled for May 15. This decision could potentially influence the Australian market, given the close trade relationship between the two countries.

Technical Analysis: AUD/JPY rises to the psychological level of 101.00

The AUD/JPY trades around 100.90 on Wednesday. The currency cross moves above April’s high of 100.81. The daily ascending channel, coupled with the 14-day Relative Strength Index (RSI) reacting above the 50 level, indicates a strengthening bullish sentiment. The immediate barrier appears at the psychological level of 101.00. A breakthrough above this level could prompt the AUD/JPY cross to test the upper boundary of the ascending channel at 101.50.

On the downside, the AUD/JPY cross could find key support at the major level of 100.50. A break below this level could lead the currency cross to the support level of 99.65, followed by the lower boundary of the ascending channel around the level of 99.00.

AUD/JPY: Daily Chart

• AUD/JPY consolidates with a positive sentiment due to the eased geopolitical tensions in the Middle East.
• Australia's Judo Bank Composite PMI indicated a rapid expansion in the Australian private sector during Q2.
• The Japanese Yen encounters challenges as the yield gap widens between Japan and other major countries.

AUD/JPY maintains stability on Tuesday following gains in the previous session. The prevailing optimistic mood may lend support to the Australian Dollar (AUD), underpinning the AUD/JPY cross, potentially influenced by a relaxed geopolitical climate in the Middle East.

Australia's Judo Bank Composite Purchasing Managers Index (PMI) surged to a 24-month high of 53.6 in April, marking an improvement from the previous month's 53.3. This signals an accelerated expansion in the Australian private sector during the second quarter, with notable growth driven by the services sector.

The Japanese Yen (JPY) faces challenges due to the expanding yield gap between Japan and many other major countries, prompting traders to borrow JPY and invest in higher-yielding assets elsewhere.

Additionally, dovish comments from Bank of Japan (BoJ) Governor Kazuo Ueda on Friday added to the pressure on the Yen. According to Reuters, Ueda emphasized the necessity for the BoJ to maintain accommodative monetary policies in the foreseeable future due to underlying inflation remaining "somewhat below" the 2% target.

Daily Digest Market Movers: AUD/JPY consolidates with an improved risk sentiment

• Australia's Judo Bank Manufacturing PMI rose to an eight-month high of 49.9 in April, compared to March's 47.3. Services PMI declined to a 2-month low of 54.2 compared to the previous reading of 54.4.
• The weekly ANZ-Roy Morgan Australian Consumer Confidence declined by 3.2 points to reach its lowest level this year at 80.3, down from the previous reading of 83.5. ANZ noted that both economic and financial subindices experienced decreases. Confidence dropped across various housing cohorts, with renters being particularly affected.
• Japan’s Jibun Bank Manufacturing PMI improved to 49.9 in April, compared to the expected reading of 48.0 and 48.2 prior. Meanwhile, Services PMI rose to 54.6 from the previous reading of 54.1.
• On Tuesday, the China Securities Journal reported that there remains a possibility that the People's Bank of China (PBoC) will decrease the Medium-term Lending Facility (MLF) rate, aiming to lower funding costs. The next MLF rate setting is scheduled for May 15. This decision could potentially influence the Australian market, given the close trade relationship between the two countries.
• The People's Bank of China maintained its Loan Prime Rates (LPR) at 3.45% on Monday. The LPR functions as a benchmark rate for Chinese banks in setting interest rates for loans extended to their clients.
• On Monday, the Chinese Ministry of Commerce announced a new tariff on US goods. Specifically, China has imposed a duty of 43.5% on imports of propionic acid from the United States. This chemical is extensively utilized in various sectors, including food, feed, pesticides, and medical applications, as per Reuters report.
• According to a Westpac report, while the RBA signaled that rates are unlikely to be raised further, greater confidence in the inflation outlook is required before contemplating the possibility of rate cuts.
• Traders are expected to closely monitor the upcoming Monthly Consumer Price Index and quarterly RBA Trimmed Mean CPI data from Australia on Wednesday.

Technical Analysis: AUD/JPY holds position around the level of 100.00

The AUD/JPY trades around 99.90 on Tuesday. The cross remains above the significant support level of 99.65, coupled with the 14-day Relative Strength Index (RSI) persisting above the 50 level, indicating an evolving bullish sentiment. The immediate barrier appears at the psychological level of 100.00, following the major level of 100.50 and April’s high of 100.81. A break above this region could lead the AUD/JPY cross to test the upper boundary of the ascending channel.

On the downside, the AUD/JPY cross could find immediate support at the psychological level of 99.50. A break below this level could lead the pair to approach the psychological level of 99.00. A break below this level could push the pair to test the lower boundary of the ascending channel and a major level of 98.50.

AUD/JPY: Daily Chart

• AUD/JPY climbs sharply, approaching the key psychological level of 100.00, buoyed by renewed optimism in global markets.
• Technical analysis highlights potential resistance at the year-to-date high of 100.81, with further targets at 101.00.
• Key support levels identified at 99.65 and 99.20, with potential downside risk to the March 28 low at 98.17.

The AUD/JPY rallies sharply amid a risk-on impulse as Wall Street resumes its rally amid a light economic docket. At the time of writing, the cross-pair trades at 99.87 clocks gains of more than 0.60%.

AUD/JPY Price Analysis: Technical outlook

The AUD/JPY witnessed the formation of a ‘hammer’ on Friday in the daily chart, suggesting that further upside is seen. However, the pair plunged sharply toward a one-month low of 97.78 last Friday on geopolitical risks. As tensions abated, the Aussie Dollar (AUD) gained traction against the Japanese Yen (JPY).

If AUD/JPY continues its rally towards 100.00, it could potentially test the current year-to-date (YTD) high at 100.81. Once this level is cleared, the next significant resistance would be at 101.00, providing clear targets for traders to considers.

On the other hand, the AUD/JPY first support would be the 61.8% Fibo retracement at 99.65. Once cleared, the pair could drop toward the Tenkan-Sen and the Senkou Span A confluence at 99.20, followed by the 99.00 mark. Once surpassed, the next stop would be the March 28 swing low of 98.17.

AUD/JPY Price Action – Daily Chart

• AUD/JPY gains ground as no significant geopolitical developments over the weekend.
• US Secretary of State Antony Blinken called for calm after an Iranian official stated no immediate plan for retaliation.
• The Japanese Yen faces challenges as BoJ Governor Kazuo Ueda stated that the central bank must keep the loose monetary policy as underlying inflation remains below its 2% target.

AUD/JPY snaps its two-day losing streak on Monday as risk-on sentiment returned, with no significant geopolitical developments over the weekend. Antony Blinken, the US Secretary of State, urged for calm after an Iranian official stated that there is no immediate plan for retaliation to the reported Israeli missile strike. Blinken made these remarks while addressing the press on Friday after the G7 meeting of foreign ministers in Capri, Italy, as reported by "The Guardian".

The Australian Dollar (AUD) edges higher alongside the higher domestic equity market. The ASX 200 Index gains ground for the second consecutive session on Monday, with the increase in metals prices, including Iron Ore, Copper, and Gold. These movements coincide with a reduction in geopolitical tensions in the Middle East, which has uplifted market sentiment.

The Japanese Yen (JPY) encounters obstacles following dovish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda during a seminar hosted by the Peterson Institute for International Economics on Friday, as per Reuters’ report. Ueda stated that the BoJ must sustain loose monetary policy for the foreseeable future as underlying inflation remains "somewhat below" its 2% target, and long-term inflation expectations are still close to 1.5%. He also indicated that the Japanese central bank is "very likely" to raise interest rates if underlying inflation continues to rise and may commence reducing its bond-buying in the future, although the timing remains undecided.

Daily Digest Market Movers: AUD/JPY appreciates on risk-on sentiment

• On Monday, the People's Bank of China maintained its Loan Prime Rates (LPR) at 3.45%. The LPR functions as a benchmark rate for Chinese banks in setting interest rates for loans extended to their clients. This decision could potentially influence the Australian market, given the close trade relationship between the two countries.
• The Chinese Ministry of Commerce has announced a new tariff on US goods. Specifically, China has imposed a duty of 43.5% on imports of propionic acid from the United States. This chemical is extensively utilized in various sectors including food, feed, pesticides, and medical applications.
• Japan’s National CPI, excluding fresh food but including fuel costs, increased 2.6% year-over-year in February, decelerating from a four-month high of 2.8% in January and falling below forecasts of 2.7%. The slowdown was attributed to mild increases in food prices, although it remained above the Bank of Japan’s 2% target due to the weakness of the Yen and high commodity prices.
• On Thursday, Bank of Japan board member Asahi Noguchi stated that the pace of future rate hikes would probably be much slower than that of its global counterparts in recent policy tightening. This is because the impact of rising domestic wages has yet to be fully transmitted to prices, as reported by Reuters.
• Analysts at Rabobank suggested that stronger Japanese economic data, coupled with stronger expectations that the Bank of Japan (BoJ) may raise rates again later this year, would likely provide the Japanese Yen (JPY) with broad-based strength. They posit that if Japanese real household incomes turn positive later this year, there is a possibility of another BoJ rate hike.
• According to a Westpac report, while the central bank signaled that rates are unlikely to be raised further, greater confidence in the inflation outlook is required before contemplating the possibility of rate cuts.

Technical Analysis: AUD/JPY moves above the major level of 99.50

The AUD/JPY traded around 99.70 on Friday. The breakthrough above the significant support level of 99.65, coupled with the 14-day Relative Strength Index (RSI) persisting above the 50 level, indicates an evolving bullish sentiment for the pair. The psychological level of 100.00 appears as the barrier, following the major level of 100.50 and April’s high of 100.81. On the downside, the AUD/JPY cross could find immediate support at the psychological level of 99.50. A break below this level could lead the pair to approach the psychological level of 99.00. A break below this level could push the pair to navigate the region around the 50-day Exponential Moving Average (EMA) at 98.67 and major level of 98.50.

AUD/JPY: Daily Chart

• AUD/JPY depreciates after the release of Japan’s inflation figures released on Friday.
• The Japanese Yen gains support from the hawkish remarks made by BoJ Governor Kazuo Ueda on Thursday.
• The Australian Dollar loses ground as soft domestic jobs data reinforced a dovish outlook on RBA’s monetary policy.

AUD/JPY continues to decline for the second consecutive session following the release of Japan's inflation data on Friday. The National Consumer Price Index (CPI) for March rose by 2.7% year-over-year, compared to a 2.8% increase in February, according to the latest data from the Japan Statistics Bureau. This index assesses the price fluctuations of goods and services bought by households.

The Japanese Yen (JPY) receives upward support from the hawkish remarks made by Bank of Japan’s (BoJ) Governor Kazuo Ueda on Thursday. According to a Reuters report, Ueda mentioned in a press conference that the central bank might consider raising interest rates again if significant declines in the Yen substantially boost inflation. This underscores the influence that currency movements could have on the timing of the next policy shift.

The Australian Dollar (AUD) experienced losses, along with a decline in the ASX 200 Index on Friday. Additionally, Australia’s 10-year government bond yield dropped below 4.3%, stepping back from over four-month highs. This retreat was attributed to soft domestic jobs data, which reinforced a dovish outlook on the Reserve Bank of Australia’s (RBA) monetary policy.

Daily Digest Market Movers: AUD/JPY depreciates on dovish RBA’s outlook

• Japan’s National CPI, excluding fresh food but including fuel costs, increased 2.6% year-over-year in February, decelerating from a four-month high of 2.8% in January and falling below forecasts of 2.7%. The slowdown was attributed to mild increases in food prices, although it remained above the Bank of Japan’s 2% target due to the weakness of the Yen and high commodity prices.
• Bank of Japan board member Asahi Noguchi stated on Thursday that the pace of future rate hikes would probably be much slower than that of its global counterparts in recent policy tightening. This is because the impact of rising domestic wages has yet to be fully transmitted to prices, as reported by Reuters.
• Analysts at Rabobank suggested that stronger Japanese economic data, coupled with stronger expectations that the Bank of Japan (BoJ) may raise rates again later this year, would likely provide the Japanese Yen (JPY) with broad-based strength. They posit that if Japanese real household incomes turn positive later this year, there is a possibility of another BoJ rate hike.
• On Thursday, Australia’s Employment Change posted a reading of -6.6K for March, against the expected 7.2K and 117.6K prior. Australia’s Unemployment Rate rose to 3.8% in March, lower than the expected 3.9% but higher than the previous reading of 3.7%.
• According to a Westpac report, while the central bank signaled that rates are unlikely to be raised further, it requires greater confidence in the inflation outlook before contemplating the possibility of rate cuts.

Technical Analysis: AUD/JPY drops to the support level of 98.00

The AUD/JPY trades around 98.20 on Friday. The breach below the significant support level of 98.65, coupled with the 14-day Relative Strength Index (RSI) persisting below the 50 level, indicates a bearish sentiment for the pair. The AUD/JPY cross could find immediate support at the psychological level of 98.00. A break below this level could lead the pair to approach the major level of 97.50. On the upside, the major level of 98.50 appears as the barrier, followed by the 50-day Exponential Moving Average (EMA). A breakthrough above the latter could support the AUD/JPY cross to explore the region around the psychological level of 99.00.

AUD/JPY: Daily Chart

• The daily RSI for the AUD/JPY demonstrates a modest uptrend, maintaining above the middle ground.
• The Hourly chart reveals mixed sentiment, with frequent RSI changes and negative momentum portrayed by the MACD bars.
• The 20-day SMA at 99.30 is the main target for the bulls.

The AUD/JPY showed a stronger stance by posting a gain of 0.27% and settling at 99.24 in Wednesday’s session. Despite the recent downside, the pair indicates a dominant bullish outlook, firmly standing above the key Simple Moving Averages (SMAs). However, the recent dip below the 20-day SMA brightened the outlook for the bears for the short term.

On the daily chart, the Relative Strength Index (RSI) pair indicates a slight positive trend. Despite dipping close to the 50 level, it recovered and retained its position in positive territory, hovering around 52. Meanwhile, the Moving Average Convergence Divergence (MACD) shows rising red bars, signaling a potential shift in momentum.

AUD/JPY daily chart

The hourly RSI reveals a mixed trend. The latest reading was 53, indicating a positive trend, while previous readings varied between positive and negative territories, revealing fluctuating market momentum. The hourly MACD shows flat red bars, signifying a steady negative momentum.

AUD/JPY hourly chart

Observing the broader prospect, the AUD/JPY's position above the 100-day and 200-day SMA reveals a robust long-term bullish trend. Any significant movements today that keep the cross above these levels won’t threaten the positive outlook, but as the bears gather momentum, some downside in the short term should be expected.

• AUD/JPY edges lower on risk aversion as traders expect Israel to respond to Iran’s assault.
• Australian Dollar faced challenges amid apprehensions that the RBA may ease monetary tightening in the foreseeable future.
• Japanese Yen could experience an intervention as Japanese ministers noted to take necessary measures to ensure FX stability.

AUD/JPY relinquishes its recent gains, likely attributable to risk aversion as investors await Israel’s reaction to Iran’s air strike on Saturday with caution. Furthermore, the Australian Dollar (AUD) encounters obstacles amid apprehensions that the Reserve Bank of Australia (RBA) may be compelled to reduce interest rates in the foreseeable future. The AUD/JPY cross trades around 99.10 during the European session on Tuesday.

The Australian Dollar (AUD) faces increased negative sentiment, which contributes to downward pressure for the AUD/JPY cross. This sentiment is driven by divergent monetary policy outlooks between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed). The “Financial Review” suggests that the RBA may need to ease monetary policy before the Fed. Furthermore, persistent high inflation in the United States (US), the world's largest economy, introduces uncertainty regarding whether the Federal Reserve will take action this year.

Moreover, However, the Australian Dollar pares losses after mixed data from its significant trading partner, China. This rebound may have helped to mitigate the losses of the AUD/JPY cross. China's Gross Domestic Product (GDP) for the first quarter of 2024 increased by 1.6% QoQ, exceeding 1.0% prior. Annual GDP growth came at 5.3%, against the expected 5.0% and the previous reading of 5.2%. However, China's Industrial Production (YoY) in March increased by 4.5%, falling short of market expectations of 5.4% and the previous reading of 7.0%.

Meanwhile, the Japanese Yen might have faced challenges due to the Bank of Japan's (BoJ) dovish outlook, consequently, limiting the downside of the AUD/JPY cross. The BoJ refrained from guiding future policy measures following the cessation of negative interest rates in March.

As per Reuter’s reports on Tuesday, Japan's Chief Cabinet Secretary Yoshimasa Hayashi emphasized the importance of currencies moving in a stable manner that reflects underlying fundamentals. He noted that authorities are closely monitoring foreign exchange (FX) movements and are prepared to take all necessary measures to ensure stability. Similarly, Japanese Finance Minister Shunichi Suzuki reiterated his vigilance regarding FX movements and affirmed his readiness to implement any measures deemed necessary.

• AUD/JPY extends its winning streak due to the persistent interest rate differential between Australia and Japan.
• There is uncertainty regarding the necessity for the RBA to implement rate cuts in 2024.
• BoJ’s Ueda shared his expectations of a gradual acceleration in the inflation trend.

The AUD/JPY pair continues its winning streak that began on April 4, climbing to near 100.30 during the European session on Tuesday. The Japanese Yen (JPY) remains subdued as the Bank of Japan (BoJ) adopts a cautious approach amidst an uncertain outlook for future rate hikes.

The AUD/JPY pair may receive upward support due to the persistent gap between Australian and Japanese interest rates. Investors are increasingly skeptical about the need for the Reserve Bank of Australia (RBA) to implement interest rate cuts in 2024, particularly following positive US data, which has raised expectations that the Federal Reserve (Fed) might maintain its higher interest rate stance for a longer period.

However, investors remain vigilant amid the possibility of Japanese authorities intervening in the market to prevent a destabilizing decline in the domestic currency. Bank of Japan (BoJ) Governor Kazuo Ueda continues to address inflation and policy outlook, with expectations of a gradual acceleration in the inflation trend. Therefore, it is crucial to monitor data and information to assess whether this scenario materializes.

Governor Ueda also emphasized that one of the factors to monitor is whether pay hikes offered in annual wage talks will materialize, as reflected in actual data. Another factor is whether service prices will increase, reflecting higher wages. If the inflation trend accelerates towards the 2% target, it may become possible to reduce the degree of monetary stimulus somewhat.

Meanwhile, the Australian Dollar (AUD) continues to advance against the Japanese Yen, despite the subdued Westpac Consumer Confidence data released on Tuesday. The AUD is bolstered by a stronger domestic equity market, with the ASX 200 Index poised for gains as investor attention remains focused on the Reserve Bank of Australia’s (RBA) interest rate decisions.

• AUD/JPY appreciates due to the likelihood of RBA to avoid rate cuts.
• Australia's 10-year bond yield surged to 4.1%, marking its highest level in over a month.
• The diminished geopolitical tension could weaken the safe-haven JPY.

AUD/JPY continues to move in the positive direction, rising to near 99.90 during the European session on Monday. This rise is attributed to the appreciation of the Australian Dollar (AUD), supported by gains in the domestic equity market. The ASX 200 Index experienced upward momentum during the opening session of the week, particularly fueled by a surge in tech stocks.

Additionally, Australia's 10-year government bond yield climbed to nearly 4.1%, reaching over one-month highs. This increase follows a rally in US bond yields, driven by stronger-than-expected US jobs data. Speculation has arisen that the Federal Reserve may maintain higher interest rates for an extended period.

Investors are growing increasingly skeptical about the need for the Reserve Bank of Australia (RBA) to cut interest rates at any point throughout 2024. This sentiment has been reinforced by more positive data emerging from the US, which has strengthened expectations that borrowing costs in the world's largest economy will remain elevated for an extended period.

In the previous week, unchanged Final Retail Sales and downbeat Trade Balance data from Australia exerted downward pressure on the Australian Dollar (AUD). Market participants are closely monitoring the prices of copper and oil, as further appreciation could potentially provide support for the Australian Dollar (AUD), consequently, underpinning the AUD/JPY cross.

The Japanese Yen (JPY) continues to face downward pressure as the Bank of Japan (BoJ) maintains a cautious stance towards further policy tightening. Additionally, reduced geopolitical tensions in the Middle East could dampen the appeal of the safe-haven JPY. Israel's decision to withdraw additional troops from Southern Gaza, likely in response to mounting international pressure, has contributed to a relaxation of tensions.

Earlier on Monday, Bank of Japan (BoJ) Governor Kazuo Ueda made remarks expressing his aspiration to simplify and enhance the clarity of the central bank's policy framework, provided economic conditions permitted. Governor Ueda made these comments while reflecting on his tenure since assuming the post approximately a year ago.