- AUD/JPY has slipped firmly to near 92.50 as the market mood sours.
- RBA Lowe will likely guide the interest rate action in the first monetary policy meeting of CY2023.
- Upbeat payroll data will delight the RBA in hiking its interest rates further.
The AUD/JPY pair has dropped sharply to near 92.40 in the Tokyo session after a breakdown of the consolidation formed in a 92.75-92.90 range. The cross follows the footprints of AUD/USD, portraying a risk-aversion theme in the currency market.
AUD/JPY has turned volatile as investors have shifted their focus towards the speech from the Reserve Bank of Australia (RBA) Governor Philip Lowe, scheduled for Wednesday. RBA Lowe is expected to guide the likely monetary policy action in the first monetary policy meeting in CY2023.
The Australian central bank hiked its Official Cash Rate (OCR) by 25 basis points (bps) to 3.10% last week as the inflationary pressures are still beyond the desired target despite signs of a slowdown in October. The inflation rate was trimmed to 6.9% from the prior release of 7.3% on an annual basis.
Apart from the RBA Lowe’s speech, investors will focus on the employment data, which will release on Thursday. The Employment Change is seen higher at 46.5K vs. the prior release of 32.2K. Also, the Unemployment Rate is seen lower at 3.3%. Upbeat payroll data will delight the RBA in hiking its interest rates further.
Meanwhile, declining Chinese inflation is accelerating the odds of policy easing by the People’s Bank of China (PBOC) to propel the growth rate and strengthen the economic prospects. This could be supportive of the Australian Dollar, being the leading trading partner of China.
On the Tokyo front, the risk of a decline in inflation has been triggered after a contraction in Gross Domestic Product (GDP) numbers. A subdued demand never propels a hike in the price rise index. Bank of Japan (BOJ) Haruhiko Kuroda believes that even if wages rise by 3%, the BOJ will maintain its ultra-loose monetary policy until inflation reaches 2%.
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
AUD/USD struggles near multi-month low below 0.6400, US CPI eyed
AUD/USD enters a bearish consolidation phase near a multi-month low of 0.6365 set on Tuesday. China's economic woes and less hawkish RBA remain a drag on the pair. Traders await the US CPI report on Wednesday before placing fresh directional bets.
USD/JPY drops from 152.00 after Japanese PPI data
USD/JPY eases from 152.00 in Wednesday's Asian trading, stalling a two-day uptrend. A hot Japan PPI report leaves the door open for a BoJ rate hike next week, supporting the Japanese Yen while the US Dollar upswing takes a breather ahead of the US CPI data release.
Gold price holds firm at around $2,700 ahead of US CPI report
Gold price sticks to its positive bias for the third straight session and advances to over a two-week high near $2,700 early Wednesday. Geopolitical tensions and the resumption of buying by China’s central bank for the first time in seven months act as a tailwind for the XAU/USD.
Ripple's XRP breaks out of downtrend as RLUSD receives greenlight from New York regulators
Ripple's CEO Brad Garlinghouse announced on Tuesday that the company received a green light from the New York Department of Financial Services on the launch of its stablecoin RLUSD.
How the US-China trade dispute is redefining global trade
Since Donald Trump took office in 2017, trade flows and market shares have changed substantially. We think that shift is set to continue under looming tariffs and a new protectionist environment.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.