- AUD/JPY oscillates below 90.00 as investors await BoJ policy announcement for fresh cues.
- Development over the successor for current BoJ Governor, Haruhiko Kuroda, will be keenly watched.
- Australian employment data will be keenly watched this week.
The AUD/JPY pair displays topsy-turvy moves in a narrow range below the round-level resistance of 90.00 in the early Asian session. The risk barometer is demonstrating a sideways auction ahead of the announcement of the first monetary policy of CY2023 by the Bank of Japan (BoJ). AUD/JPY is following the footprints of consolidating AUD/USD, portraying an ambiguity in the risk profile.
Broadly, the cross is gradually scaling higher from Friday as investors expect that the BoJ might not come up with any policy change as it could trigger financial market risk, and efforts of ramping inflation might be unsuccessful. Earlier, the BoJ announced that the central would review the side effects of the decade-long ultra-loose monetary policy, which created an expression that the central bank is keen to exit from the easy policy.
Analysts at Standard Charted expect the BoJ to keep the policy balance rate and the 10Y yield target unchanged at -0.1% and 0%, respectively. They further added that policymakers would assess the potential impact of the recent decision to widen the 10-year JGB band to +/-50 bps (from +/-25 bps) at its December meeting.
Development over the successor for current BoJ Governor Haruhiko Kuroda will be keenly watched. Reuters reported on Tuesday that the new BoJ governor nominee, likely to be presented to parliament on Feb 10, has provided some development. Career c.bankers Amamiya, Nakaso, and Yamaguchi are seen as top candidates
On the Australian front, investors are awaiting the release of the employment data, which is scheduled for Thursday. As per the consensus, the Unemployment Rate is expected to remain steady at 3.4%. Apart from that, the Australian economy must have added 22.5K fresh jobs in the labor market in December, lower than the former additions of 64K.
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 could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.