AUD/JPY ignores downbeat RBA minutes as bulls tease December 2018 peak
|- AUD/JPY rises for the fourth consecutive day to challenge 26-month high.
- RBA minutes cite the need for “significant monetary support.”
- Upbeat sentiment supersedes RBA minutes amid off in China.
- US 10-year Treasury yields, S&P 500 Futures and ASX 200 all print market optimism.
AUD/JPY refreshes multi-month high to 82.19, currently around 82.12, during Tuesday’s Asian session. In doing so, the quote suspends challenges to the bulls raised by the recently published RBA minutes. The reason could be traced from the risk-on mood.
While highlighting the importance of the extended Quantitative Easing (QE), the RBA board also mentioned about, per the Minutes, few signs of deterioration in home lending standards that would be monitored closely.
Read: RBA Minutes: “Very significant” monetary support to be needed for some time
Even if the event matched wide market expectations, AUD/JPY traders tracked risk catalysts to the north while refreshing the highest since December 2018.
While portraying the mood, S&P 500 Futures and Australia’s ASX 200 rise 0.50% each whereas the US 10-year Treasury yields jump to the highest in 11 months by press time.
Behind the moves could be the hopes of the US covid relief package and the recent positive developments over the coronavirus (COVID-19) and its vaccine. Herein Victoria’s lockdown battles the optimism ahead of the mass vaccinations in Australia while the reduction in the infections in the UK and Israel after the immunization also keeps the market players hopeful. It should, however, be noted that the off in China probes the rally.
It’s worth mentioning that the comments from Japanese Finance Minister Taro Aso as well as the Bank of Japan (BOJ) Governor Haruhiko Kuroda, favoring the need for further easy monetary and fiscal policies, offered extra strength to the AUD/JPY moves.
Looking forward, a light calendar and China’s holidays will eye for fresh risk catalysts to extend the latest rally to a multi-month top.
Technical analysis
A sustained break of 82.20 becomes necessary for the bulls to eye for the September 2018 high near 82.50. However, AUD/JPY sellers are less likely to enter until witnessing a clear break below an ascending trend line from August 2020, at 81.62 now.
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