AUD/JPY: Aussie policymakers’ actions battle virus-led risk-off below 75.00
|- AUD/JPY keeps pullback from the intraday high of 74.83.
- Australian Treasurer hints extension of the coronavirus countermeasures, DFAT upgrades travel warning for China.
- Receding cases in Victoria fails to defy lockdown in Melbourne and surrounding cities.
- Japan’s Nishimura urges for immediate support to combat the pandemic.
AUD/JPY recedes from the intraday high of 74.83 to 74.68 during the early Wednesday. The pair snapped a three-day winning streak on Tuesday but the following weakness in the Japanese currency trouble traders at the moment.
Talking about the positives, Victoria’s coronavirus (COVID-19) cases recede from 191 to 134 on Tuesday. Further, Australian Treasurer Josh Frydenberg recently hinted an extension to income support schemes beyond the initial limit of September.
On the contrary, a six-week-long lockdown, announced the previous day, remains intact in Melbourne whereas Australia’s Depart of Foreign Affairs and Trade (DFAT) warned that their citizens living in and traveling to China may be arbitrarily detained, per Sydney Morning Herald. Additionally, the broad risk-off sentiment, backed by the rising cases in the US and Tokyo, as well as the Sino-American tension, acts as an extra burden on the market’s risk-tone sentiment.
While portraying the grim mood of traders, Wall Street benchmarks marked a negative daily closing the previous day while stocks in Australia and Japan carry the moves as we write. Further, the US 10-year Treasury yields seesaw around the multi-week low of 0.65% whereas S&P 500 Futures print mild gains around 3,140 amid risk-reset.
It’s worth mentioning that Japanese Economy Minister Yasutoshi Nishimura recently urged for the immediate coronavirus countermeasure. Further, the Bank of Japan (BOJ) cites the record 6.2% hike in June month bank deposits as well as a surge in the Certificate of Deposits (CDs) to mark the investors’ rush in the safe-haven currency.
Although risk catalysts are likely to keep the pair pressured, the yen moves may take clues from the US dollar’s performance and Japan’s June month Eco Watchers Survey data.
Technical analysis
Failures to cross the mid-June top surrounding 75.10 drag the quote towards a two-week-old ascending support line near 74.30. Though, 21-day SMA close to 74.00 might probe the bears afterward.
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