- The AUD/JPY is trading at 98.49, recording a 0.10% daily decline in Tuesday's session.
- The Japanese Yen is strengthening, propelled by an unexpected surge in Japan's January CPI data.
- Speculations of a shift in the Bank of Japan's hawkish policy are emerging, although disinflationary pressures persist.
The AUD/JPY pair is trading at 98.49, a minor 0.10% drop in Tuesday's session. This slight decline is observed amid the strengthening of the Japanese Yen, attributed to the surge in Japan's Consumer Price Index (CPI) during January.
In that sense, Japan's latest national CPI figures for January indicated a slight increase above expectations. The headline inflation rate was reported to have risen by 2.2% (YoY), against a forecast of 1.9%, and down from 2.6% in December. The core inflation rate, which excludes fresh food, was recorded at 2.0% YoY, meeting the expectations of 1.9% and a decrease from 2.3% in the previous month. Following the figures, both the JPY and the yields on Japanese Government Bonds (JGB) experienced an uptick, with the 2-year yield reaching its highest point since 2011 as markets renewed their hopes on a sooner liftoff of the Japanese banking authority. However, it's worth mentioning, that inflation is still trending downward, suggesting the Bank of Japan (BoJ) has room to maintain a cautious approach towards policy normalization. As for now, markets are gearing up for a liftoff in June, but the bank may delay it further.
AUD/JPY technical analysis
On the daily chart, the Relative Strength Index (RSI) predominantly roams in positive territory, emphasizing a fair control of buyers over the market's direction. Despite some of its negative slope, the pair maintains its foothold in the positive zone, signaling that the bulls are still in charge.
Simultaneously, decreasing green bars on the Moving Average Convergence Divergence (MACD) histogram denotes a decline in positive momentum. Buyers, though active, are gradually losing ground, encouraging caution on the part of the bulls. However, the pair is still above its main Simple Moving Averages (SMAs) of 20,100, and 200 days, which suggests that the overall trend is still bullish, and the mentioned downward movements could be considered as a consolidation.
AUD/JPY daily chart
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 clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.