- AUD/JPY pics ups bids to refresh weekly high.
- Firmer Treasury yields, upbeat equities weigh on JPY.
- Australia marked biggest covid count in 10 months, Tokyo emergency extended on Monday.
- China trade data, BOJ and coronavirus updates become the key.
AUD/JPY rises to refresh intraday high near 82.65, up 0.16% on a day, during Tuesday’s Asian session. That said, the pair extends Friday’s rebound from a five-month low for the third consecutive day despite the looming coronavirus (COVID-19) concerns in Australia and Japan.
Having witnessed the highest virus infections since September, Aussie policymakers tighten activity restrictions in key areas, like New South Wales, while also signaling extended lockdowns for a few weeks. On the other hand, Japanese authorities have already stretched Tokyo emergency and are up for providing free vaccine passports, not to forget holding no-spectator Olympics, to shrug off criticism of holding sports carnival amid pandemic.
Alternatively, UK diplomats remain on the path to unlock on July 19 while the US health officials turn down the need for Pfizer booster shots for fully vaccinated Americans.
On the same line, market sentiment also remains mildly optimistic as economic reopening flashed upbeat results in Q2, which in turn could keep central banks away from tapering and rate hikes, at least for now.
Against this backdrop, stock futures wobble around the record top whereas equities in Australia and Japan gains 0.50% and 0.78% by the press time. It’s worth noting that the US 10-year Treasury yields stay firmer for the third consecutive day.
Moving on, the covid headlines and China’s trade numbers for June may entertain intraday traders. However, major attention will be given to this week’s Bank of Japan (BOJ) monetary policy meeting as policymakers may downgrade economic forecasts amid the virus resurgence and weigh on the Japanese yen (JPY).
Technical analysis
AUD/JPY extends bounce off 200-day EMA towards a two-week-old resistance line near 82.95 but bearish MACD keeps sellers hopeful to retest 81.40 key EMA support.
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