- AUD/JPY stages a modest recovery from a nearly one-month low touched earlier this Friday.
- The mostly upbeat Chinese macro data underpins the Aussie and lends support to spot prices.
- Bets for another BoJ rate hike next week favors the JPY bulls and cap the upside for the cross.
The AUD/JPY cross recovers slightly from a nearly one-month low, around the 96.26 region touched during the Asian session on Friday and for now, seems to have snapped a two-day losing streak. Spot prices stick to modest intraday gains near mid-96.00s following the release of Chinese macro data, though the fundamental backdrop warrants some caution for bullish traders.
The National Bureau of Statistics (NBS) reported that China's economy expanded by 5.4% over the year in the fourth quarter of 2024 after recording a 4.6% growth in the previous quarter. This was well above consensus estimates for a reading of 5% and was accompanied by better-than-expected Retail Sales, which increased by 3.7% in December as compared to 3% prior. Adding to this, Industrial Production arrived at 6.2% vs. 5.4% forecast, while the Fixed Asset Investment advanced 3.2% year-to-date (YTD) YoY in December, providing a modest lift to the China-proxy Aussie.
Apart from this, a modest downtick in the Japanese Yen (JPY) lends some support to the AUD/JPY cross. Any meaningful JPY depreciation, however, seems elusive in the wake of rising bets that the Bank of Japan (BoJ) will hike interest rates again next week. The expectations were reaffirmed by the recent remarks from BoJ Governor Kazuo Ueda and Deputy Governor Ryozo Himino. This, along with a softer risk tone and worries about US President-elect Donald Trump's tariff plans, could underpin the safe-haven JPY and cap the perceived riskier Australian Dollar (AUD).
Furthermore, the Reserve Bank of Australia's (RBA) dovish shift warrants some caution before positioning for any further near-term appreciating move for the AUD/JPY cross. Traders might also opt to move to the sidelines and keenly await the highly-anticipated BoJ monetary policy meeting on January 23-24 to confirm the next leg of a directional move for spot prices.
Economic Indicator
Gross Domestic Product (YoY)
The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a monthly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Renminbi (CNY), while a low reading is seen as bearish.
Read more.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD dips below 1.1000 as Trump authorizes 90-day pause on tariffs
EUR/USD retreated below the 1.1000 mark on headlines indicating that United States President Donald Trump authorized a 90-day pause on non-retaliating countries. The pause applies to reciprocal and 10% tariffs, effective immediately, according to a Truth Social post. FOMC Minutes indicated increasing uncertainty.
GBP/USD eases further on tariffs pause announcement, USD still weak
GBP/USD's correction seems to have met a decent contention around the 1.2750 zone so far on Wednesday, as investors continue to assess the ongoing US-China trade war. US doubles the bet, announced 125% levies on Chinese imports.
Gold recedes to $3,050 on Trump's headlines
Gold prices now give away part of their advance and revisit the $3,050 zone per troy ounce after President Trump announced a 90-day pause on reciprocal and 10% tariffs. FOMC Minutes passed unnoticed as optimism returned.
Dow Jones Industrial Average rockets 6% higher on tariff suspension
The Dow Jones Industrial Average (DJIA) skyrocketed on Wednesday, surging over 6% on the day and returning to the 40,000 handle after the Trump administration announced yet another pivot on its own tariff policies.
Tariff rollercoaster continues as China slapped with 104% levies
The reaction in currencies has not been as predictable. The clear winners so far remain the safe-haven Japanese yen and Swiss franc, no surprises there, while the euro has also emerged as a quasi-safe-haven given its high liquid status.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.