AUD/JPY remains on the defensive after RBA minutes

AUD/JPY is on the offer Tuesday morning as the minutes of the Reserve Bank of Australia's (RBA) first meeting for 2020 showed the policymakers are willing to ease further to support growth, jobs and consumer price index (CPI). 

The RBA kept rates unchanged at a record low of 0.75% earlier this month and offered a hawkish surprise by stating that the rates may remain on hold in the near future, contrary to market expectations for a rate cut hint amid rising coronavirus scare.

The minutes, however, sounded somewhat less optimistic with policymakers stressing that global risk is still intact despite the US-China trade deal. Policymakers reviewed the case for a rate cut in February and were of the opinion that additional easing could spur borrowing and a strong upswing in housing, the minutes showed. 

As a result, the AUD/JPY is keeping losses near 73.55 seen ahead of the minutes release. The pair ran into offers near 73.78 earlier today, tracking the risk-averse tone in the financial markets. 

Chinese health authorities confirmed 1,886 new cases of coronavirus and 98 new deaths as of Feb 17. Further, an article written in the Caixin said that almost twice as many Chinese medical workers have been infected as officially reported by the government. 

The S&P 500 futures are currently reporting a 0.20% drop. The index futures could suffer deeper losses, pushing the yen higher across the board as Apple Inc. said on Monday it would not meet its revenue guidance for the March quarter because of the coronavirus outbreak. 

All in all, the risks are skewed to the downside for the AUD/JPY. 

Technical levels