AUD/JPY bounces off seven-week low as BoJ keeps monetary policy unchanged to bid adieu to Kuroda


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  • AUD/JPY marks 70-pip rebound from multi-day low on BoJ, picking up bids of late.
  • BoJ defends current monetary policy status even as the dovish Governor departs after a decade.
  • Governor Kuroda’s speech, risk catalysts eyed for fresh impulse.

AUD/JPY portrays a rollercoaster move as the Bank of Japan (BoJ) refrains from any major surprises even as Governor Haruhiko Kuroda braces for a goodbye during early Friday. That said, the cross-currency pair initially dropped to 89.26 and refreshed the seven-week low before rallying to the 90.00 threshold, around 89.90 by the press time.

BoJ keeps the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields within the band of +/-0.50%. The BoJ Statement, however, mentioned that inflationary expectations are rising, which in turn raises doubts about the future of the Japanese central bank’s ultra-easy monetary policy.

Also read: BoJ: Inflation expectations heightening

Apart from the BoJ moves, a news piece from Bloomberg suggesting that China’s consumer spending is showing signs of a strong rebound joins the hopes of more stimulus from the dragon nation and the US readiness for more spending seems to also favor the AUD/JPY buyers.

Amid these plays, S&P 500 Futures dropped to a fresh low since January 10, down half a percent near 3,900, whereas the US 10-year and two-year Treasury bond yields fall for the second consecutive day to 3.83% and 4.76% in that order.

Elsewhere, the geopolitical fears surrounding China and the US, mainly due to Taiwan, as well as fears emanating from Russia, exert downside pressure on the AUD/JPY prices.

It should, however, be noted that the dovish rhetoric from Reserve Bank of Australia (RBA) Governor Philip Lowe, compared with likely challenges to the BoJ’s ultra-easy monetary policy and the market’s bets of an interest rate hike during late 2023, seems to also cap the AUD/JPY prices ahead of a volatile day.

Technical analysis

Failure to provide a decisive break of an upward-sloping support line from late January 2022, around 89.50 by the press time, keeps AUD/JPY buyers hopeful of poking the previous support line from early January 2023, close to 90.40 at the latest.

AUD/JPY

Overview
Today last price 89.91
Today Daily Change 0.24
Today Daily Change % 0.27
Today daily open 89.67
 
Trends
Daily SMA20 91.76
Daily SMA50 91.14
Daily SMA100 91.95
Daily SMA200 93.1
 
Levels
Previous Daily High 90.67
Previous Daily Low 89.55
Previous Weekly High 92.25
Previous Weekly Low 91.28
Previous Monthly High 93.06
Previous Monthly Low 90.24
Daily Fibonacci 38.2% 89.98
Daily Fibonacci 61.8% 90.24
Daily Pivot Point S1 89.25
Daily Pivot Point S2 88.84
Daily Pivot Point S3 88.13
Daily Pivot Point R1 90.38
Daily Pivot Point R2 91.08
Daily Pivot Point R3 91.5

 

 

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