AUD/JPY breaks 84.00 to snap five-day uptrend on China’s PMI surprise, downbeat markets

AUD/JPY justifies surprisingly weak China PMI and mixed market sentiment while staying pressured around the intraday low of 83.80 during early Thursday. While the latest downbeat catalysts weigh on the quote, early Asia’s positive factors challenge the pair’s further weakness.

March’s Caixin Manufacturing PMI from China declines below 51.3 forecasts and 50.9 prior to 50.6. In doing so, the private industry survey differs from upbeat official readings published earlier in the week.

Read: AUD/USD: Refreshes weekly bottom below 0.7600 on downbeat China Caixin PMI

Before a few hours, Australia’s Trade Balance for February eased from 9700M forecast to 7529M, versus 10142M prior, whereas Retail Sales shrank less than initial estimations of -1.1% to -0.8% during the stated period. Further details suggest Imports rose beyond -2.0% previous readouts to +5.0% and the Exports dropped from 6.0% to -1.0% for the reported period.

Also populating the Aussie calendar were data for Home Loans and Investment Lending for Homes eased in February, which came in mixed, as well as AiG Performance of Mfg Index for March, 59.9 versus 58.8 prior.

While the Aussie and China data couldn’t offer a clear direction to the AUD/JPY moves, Japan’s strong Tankan survey figures for Q1 2021 and risk-off mood seem to play their roles in taming the quote.

It’s worth mentioning that the news suggesting no lockdown extension in Australia’s Brisbane and an absence of fresh covid cases in the New South Wales should have favored the AUD/JPY bulls buy failed. The reason could be traced from fears of an uphill task for US President Joe Biden to get his plan approved and fresh covid variant in Brazil, not to forget the West versus China tussle.

Amid these plays, S&P 500 Futures seesaw above 3,950 whereas the US 10-year Treasury yields fail to portray a major move. However, markets in Asia-Pacific stay mostly positive amid hopes of further stimulus.

Moving on, the Asian calendar has fewer details to watch and hence risk catalysts will be the key follow for fresh impulse.

Technical analysis

Unless breaking below 83.85-60 support zone comprising 10-day and 21-day SMA, AUD/JPY remains on the bull’s radar.