AUD/JPY ignores downbeat catalysts from Japan as risk sentiment dwindles

With the renewed tension surrounding Hong Kong protests and on-going uncertainty concerning the US-China trade relations, AUD/JPY steps further backward from late-July highs to 74.83 amid Asian session on Monday.

While China’s Global Times keeps criticizing the United States' (US) trade protectionism, Trump’s administration’s lack of confirmation on stepping back the tariffs reignites the fear of another failed talks between the world’s two biggest economies.

Further, protests in Hong Kong turned severe with the Bloomberg news spotting protesters disrupted subways lines after the earlier South China Morning Post’s (SCMP) news marking a protester shot with live rounds by the police.

In a reaction, the S&P500 Futures flash 0.13% loss while Gold and the Japanese yen (JPY) seem to recover the latest losses.

Traders seem to have shrugged off Bank of Japan’s (BOJ) Summary of Opinions of the October monthly meeting, citing bearish bias, while also ignoring weaker than forecast numbers of September month Machinery Orders.

Markets now keep an eye over Japan’s Eco Watchers Survey data for October. While forecasts concerning the Outlook part favor 41.3 prints versus 36.9 prior, Current proportion of the survey is likely to have increased to 47.1 from 46.7 earlier. Additionally, trade headlines will continue entertaining investors.

Technical Analysis

A sustained break of short-term rising trend-line, now at 74.75, becomes necessary for sellers to revisit 21-day Simple Moving Average (SMA) level of 74.48, until then chances of its U-turn to 75.30 and the recent high near 75.65/70 stay on the cards.