AUD/JPY slides towards 93.50 after RBA Minutes, Japan’s verbal intervention
|- AUD/JPY renews intraday low, reverses from eight-day high.
- RBA Minutes, Deputy Governor Bullock tried to defend hawks but failed.
- Multiple policymakers from Japan signal readiness to act even if no actual measures are taken.
- Japan’s action becomes necessary for the bear’s return, risk-on mood favors buyers.
AUD/JPY consolidates the week-start gains around 93.70, reversing from an eight-day high, as Japanese policymakers try hard to convince markets that they can defend the yen if needed. Also challenging the pair buyers is the latest Monetary Policy Meeting of the Reserve Bank of Australia (RBA) and comments from RBA Deputy Governor Guy Bullock.
With the USD/JPY prices rallying to the 30-year high, markets expect Japanese intervention to defend the domestic currency. However, the policymakers from Japan have been trying to cover up their resistance to meddle in the market while showing readiness to do so.
Recently, Japanese Prime Minister Fumio Kishida stated that he wouldn't comment on specific yen levels but govt ready to take appropriate action as needed. On the other hand, Bank of Japan (BOJ) Governor Haruhiko Kuroda mentioned, “BOJ will keep close eye on fx, market moves and their impact on economy.”
Elsewhere, the RBA Meeting Minutes stated that the board weighed a range of arguments for hiking by 50 basis points, as it had for four months straight, but decided to lift the cash rate by 25 basis points to 2.6%.
On the same line, RBA Deputy Governor Guy Bullock mentioned that the board expects to increase interest rates further over the coming months. The policymaker also added that the pace and timing would be determined by data.
Furthermore, China’s zero-covid policy, delaying of the key data/events and determination to defend the might of taking control in Hong Kong and Taiwan also challenge the AUD/JPY buyers, due to the pair’s risk barometer status and ties with Beijing.
It should be noted that the risk-on mood, inspired by the UK’s latest U-turn on “mini-budget”, seemed to have restricted the AUD/JPY downside of late.
Moving on, Japan’s intervention is closely eyed and can drown the quote on announcements. Until then, a light calendar and cautious mood may restrict the AUD/JPY pair’s moves.
Technical analysis
Until dropping below the resistance-turned-support from mid-September, near 92.60 at the latest, AUD/JPY bulls remain hopeful of challenging the 100-DMA hurdle surrounding 94.25.
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.