AUD/JPY edges higher to near 96.80 after rebounding from two-month lows, US NFP eyed

AUD/JPY recovers from a two-month low at 95.50 recorded on Thursday.
A Reuters Poll expects RBA to maintain its current interest rate of 4.35% in the February meeting.
The previous week’s foreign investment might have supported the Japanese Yen.

Akhtar Faruqui FXStreet

AUD/JPY continues to gain ground, recovering from the two-month low at 95.50 observed in the previous session. The cross trades higher around 96.80 during the European session on Friday. The Australian Dollar (AUD) has found support from an improved Australian money market, contributing to the strength of the AUD/JPY cross.

Furthermore, the better-than-expected Producer Price Index (PPI) data from Australia underpinned the Aussie Dollar, subsequently underpinning the AUD/JPY cross. The Australian Bureau of Statistics has released the PPI (YoY) for the fourth quarter, reporting an improvement with a growth rate of 4.1%, surpassing the previous growth of 3.8%.

On Thursday, a Reuters Poll showed an expectation that the Reserve Bank of Australia (RBA) could maintain the current interest rate of 4.35% in its upcoming February meeting. Furthermore, former RBA board member Warwick McKibbin suggested that the Australian cash rate may remain around 4.5% for an extended period.

The Australian Dollar has faced challenges, as bond traders have increased their expectations of early interest rate cuts by the Reserve Bank of Australia (RBA) following an unexpectedly weak quarterly inflation report. Futures markets are fully pricing in 50 basis points reductions in 2024, with the first adjustment anticipated in August.

The Bank of Japan's (BoJ) hawkish stance has provided support for the Japanese Yen (JPY). Additionally, the escalated geopolitical tensions in the Middle East might have driven the investors towards the safe-haven Japanese Yen, consequently capping the advances of the AUD/JPY cross.

The Japanese Yen might have gained support from the influx of foreign investment. For the week ending January 26, Foreign Bond Investment in Japan recorded inflows of ¥382.9 billion, a significant turnaround from the previous week's outflows of ¥43.5 billion. Additionally, Foreign Investment in Japanese Stocks rebounded during the same week, rising to ¥720.3 billion compared to the previous week's ¥287 billion.

AUD/JPY: important levels to watch

Overview
Today last price	96.78
Today Daily Change	0.60
Today Daily Change %	0.62
Today daily open	96.18

Trends
Daily SMA20	97.14
Daily SMA50	96.82
Daily SMA100	96.33
Daily SMA200	95.04

Levels
Previous Daily High	96.6
Previous Daily Low	95.5
Previous Weekly High	97.88
Previous Weekly Low	96.92
Previous Monthly High	97.88
Previous Monthly Low	95.84
Daily Fibonacci 38.2%	95.92
Daily Fibonacci 61.8%	96.18
Daily Pivot Point S1	95.59
Daily Pivot Point S2	95
Daily Pivot Point S3	94.5
Daily Pivot Point R1	96.69
Daily Pivot Point R2	97.19
Daily Pivot Point R3	97.78

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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