AUD/JPY jumps to multi-week top after Australian CPI, remains below 96.00 mark
|- AUD/JPY gains strong positive traction on Wednesday and rallies to over a three-week high.
- The Australian CPI lifts bets for a 25 bps RBA rate hike in November and boosts the AUD.
- A positive risk tone undermines the safe-haven JPY and contributes to the strong move up.
The AUD/JPY cross catches aggressive bids during the Asian session on Wednesday and spikes to the 95.90 region, or over a three-week high following the release of Australian consumer inflation figures.
Data from the Australian Bureau of Statistics (ABS) showed that the Consumer Price Index (CPI) inflation grew 1.2% in the third quarter from the prior quarter and the yearly rate decelerated from 6% to 5.4% during the July-September period. The readings, however, were slightly higher than consensus estimates and lifted market bets for a 25 bps lift-off by the Reserve Bank of Australia (RBA) at its next policy meeting on November 7. This, in turn, provides a strong boost to the Australian Dollar (AUD) and the AUD/JPY cross.
Apart from this, a generally positive risk tone is seen undermining the safe-haven Japanese Yen (JPY) and turns out to be another factor acting as a tailwind for the cross. That said, speculations that Japanese authorities will intervene in the FX market to combat a sustained depreciation in the JPY might hold back traders from placing aggressive bullish bets and act as a headwind for the AUD/JPY cross. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the upside.
Even from a technical perspective, an intraday move above the 95.65 supply zone favours bullish traders. That said, it will still be prudent to wait for some follow-through buying beyond the 96.00 round figure before positioning for any further appreciating move. The AUD/JPY cross might then accelerate the momentum further towards the September monthly swing high, around the 96.90 region. Traders now look to the release of the Tokyo Core CPI on Friday for some meaningful impetus.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.