AUD/JPY reverses losses as Asian stocks rise
|- AUD/JPY rises from 73.55 to 73.80 as Asian stocks rise.
- Risk reset remains vulnerable to coronavirus numbers, lingering trade, and geopolitical tensions.
Signs of risk reset in the Asian equity markets are boding well for AUD/JPY, a risk barometer. The pair has recovered from the session low of 73.55 to trade largely unchanged on the day at 73.80.
Asian stocks rise
Major Asian indices like Japan's Nikkei and Australia's S&P/ASX 200 are reporting over 1% gains and keeping the anti-risk yen under pressure.
Stocks are likely cheering the late session resurgence on Wall Street reportedly fueled by news that the Federal Deposit Insurance Commission and Office of the Comptroller of the Currency are planning to loosen restrictions on banks imposed by the Volcker rule. The move would free up billions of dollars in capital for the industry, according to the Wall Street Journal.
The risk reset, however, remains vulnerable to rising coronavirus cases in the US and other parts of the world, heightened prospects of a trade tiff between the US and the European Union, and lingering tensions between the US and China.
On Thursday, German Chancellor Angela Merkel attacked the Nordstord 2 project in retaliation to the Trump administration’s plan to impose new tariffs on the EU/UK goods worth $3.1 billion. Additionally, Brussels also criticized US efforts. Meanwhile, the US Senate on Thursday passed a bill to impose sanctions on Chinese officials and businesses involved in violating Hong Kong’s independence. The bill now goes to the House of Representatives.
Technical levels
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.