AUD/JPY has been hammered since news came out, via FT, that BoE's Weale now favours immediate stimulus. While the headline may not have a direct effect on the pair, it triggered a major sell-off in the Sterling, which has also led to relentless strength in the Japanese Yen with the Nikkei 225 selling-off, reinforcing the 'risk-off' conditions, which has acted as a standalone negative input for the Aussie.
'Risk off' conditions all around
At present, the Nikkei 225 is being severely punished, last at 16,449.00, down 1.03%, with Gold spiking higher and the 30-year US Treasury bonds well bid as the sudden turn on risk conditions causes market participants to seek the protection of safe-haven assets. Note, the next big mover for the pair, outside 'risk on/off' conditions, will be Australia's CPI Q2 report on Wednesday, followed by the BOJ monetary policy decision on Friday.
AUD/JPY key levels for today
Technically, AUD/JPY faces its first level of support at 78.50 (current day low), followed by 78.00 round number, 77.50 ahead of 77.30 macro support. On the upside, as long as 79.00 is not re-taken, the inertia should be for the trend to remain bearish in the sessions to come. Should 79.00 be reclaimed, then ext levels of resistance shold be found at mid and round numbers 79.50 and 80.00.
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