AUD/JPY drops to near 87.80 as monthly Australian inflation softens to 6.8%

AUD/JPY has dropped sharply to near 87.80 as Australian inflation has softened further to 6.8%.
The collaborative effect of weaker Retail Sales and softening price index would support the RBA in keeping policy unchanged.
BoJ Kuroda remained extremely dovish for further monetary policy as the sustainable inflation target has not been met yet.

Sagar Dua FXStreet

The AUD/JPY pair has slipped firmly to near 87.80 as the Australian Bureau of Statistics has reported further softening in the monthly Consumer Price Index (CPI) (Feb). The economic data has landed at 6.9%, lower than the consensus of 7.1% and the former release of 7.4%.

On Tuesday, Australian Retail Sales expanded by 0.2%, lower than the consensus of 0.4% and the former release of 1.9%. A weaker-than-expected retail demand indicates that households are bearing the burden of higher inflation and are facing issues in offsetting the impact of inflated products with current paying capacity.

The collaborative effect of weaker Retail Sales and softening price index would support the Reserve Bank of Australia (RBA) in keeping monetary policy unchanged in its April meeting. Investors should be aware of the fact that RBA Governor Philip Lowe has already pushed its Official Cash Rate (OCR) to 3.60% in March.

Going forward, China’s Bureau of Statistics will report Manufacturing and Non-Manufacturing PMI data on Friday. A decent performance is expected by the market participants as the Chinese economy is promoting growth through monetary measures after dismantling pandemic controls. It is worth noting that Australia is the leading trading partner of China and accelerating economic activities in China will also support the Australian Dollar.

On the Japanese Yen front, the ex-bank of Japan Governor Haruhiko Kuroda remained extremely dovish for further monetary policy as the sustainable inflation target has not been met yet. He further added, “It is premature to debate an exit from easy monetary policy.” And, “More time is needed to stably and sustainably hit the price target.”

AUD/JPY

Overview
Today last price	88.06
Today Daily Change	0.27
Today Daily Change %	0.31
Today daily open	87.79

Trends
Daily SMA20	89.25
Daily SMA50	90.67
Daily SMA100	91.14
Daily SMA200	92.7

Levels
Previous Daily High	87.88
Previous Daily Low	87.15
Previous Weekly High	89.24
Previous Weekly Low	86.06
Previous Monthly High	93.06
Previous Monthly Low	90.24
Daily Fibonacci 38.2%	87.6
Daily Fibonacci 61.8%	87.43
Daily Pivot Point S1	87.34
Daily Pivot Point S2	86.88
Daily Pivot Point S3	86.61
Daily Pivot Point R1	88.07
Daily Pivot Point R2	88.34
Daily Pivot Point R3	88.8

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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