AUD/JPY consolidates recent losses near 84.50 amid off in Australia, China
|- AUD/JPY licks its wounds around one-week low, refreshes session top.
- Australia inks climate deals with Japan, Germany, eyes UK trade talks.
- Japan PM Suga ready for general election if opposition uses no-confidence vote.
- Japan’s Industrial Production for April, risk catalysts eyed.
AUD/JPY prints mild gains around 84.55, up 0.07% intraday, amid Monday’s quiet Asian session. In addition to the extended weekend in Australia and China, a light calendar and an absence of surprises from the latest Group of Seven (G7) meeting seems to back the quote’s latest consolidation.
Although the G7 verdict confirmed negative bias for China, Australia’s largest customer, the move was widely expected. Among the other moves, the global leaders agreed to donate more covid vaccines to the needy nations and discussed climate change, not to forget praising fiscal and monetary reliefs.
“The Group of Seven rich nations promised to tackle China's growing influence, fight climate change, get more COVID-19 jabs to poor countries and keep up their economic stimulus programs at their first summit since Joe Biden became U.S. president,” said Reuters.
Also contributing to the AUD/JPY uptick is the Australian drive to sign fresh trade deals with the UK, as well as firming up ties with Japan and Germany by signing to develop lower-emission technology.
It’s worth noting that Japan PM Yoshihide Suga’s warning to the opposition party over calling of the no-confidence vote, as well as cautious sentiment ahead of this week’s Fed meeting, weigh on the quote’s upside momentum.
Amid these plays, S&P 500 Futures print mild gains near the record top flashed on Friday.
Moving on, Japan’s April month Industrial Production, expected to remain unchanged at 15.4%, may entertain AUD/JPY traders amid an off in Australia and China. However, the risk catalysts keep the driver’s seat.
Technical analysis
Although the 21-day SMA breakdown favors AUD/JPY sellers, a clear break of 84.45-50 support zone, comprising 50-day SMA and an ascending trend line from late March, restricts the pair’s short-term downside.
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