AUD/JPY looks to gain beyond 84.50 amid risk-on sentiment, ahead of Aussie data

• AUD/JPY trades with modest gain in the initial Asian session.
• Risk aversion amid growth optimism supports the cross move.
• Yen remains sidelined on rising coronavirus infections. 

The AUD/JPY price treads water in the Asian session. The cross opened lower but managed to bounce back to hold onto the positive trajectory.

At the time of writing, the AUD/JPY cross is trading at 84.33, up 0.5% for the day.

Investors' risk appetite improved as inflationary nervousness seemed to calm down. Fed officials reinstated that it is too early to discuss the tapering measures and rollout of the current accommodative monetary policy. This, in turn, helped the perceived riskier aussie to gain footholds against its counterpart. 

In addition to that, upbeat economic data in the home country also boosted the prospects for the AUD. The Retail Sales grew by 1.1% in April, beating the market expectations of 0.5%. 

Meanwhile, mounting coronavirus cases in Victoria, the second most populous state, warns of a ‘snap lockdown’. The lockdown slows down the economic activity and negatively impacts the growth outlook.

On the other hand, the yen is solely benefiting from its safe-haven appeal, despite the Bank of Japan (BOJ) Governor Harhiko Kuroda repeatedly warning of economic slowdown due to the extended lockdown and slower vaccination program in the country.

It is worth noting that the S&P 500 Futures are trading at 4,193 with gains of  0.19% while the Fear and Greed index VIX stood at 18.84, up 2.39% for the day. This index remains on the higher side indicating anxiety among investors. This, in turn, limits any further gains for the cross.

As for now,  traders are looking forward to the release of the Australia Construction Work Done, and Westpac Leading Index to gauge the market sentiment.

AUD/JPY Additional Levels