AUD/JPY remains sidelined above 72.00 after RBA minutes

AUD/JPY has seen little action following the RBA minutes.
The minutes confirmed the RBA's easing bias and that the central bank is in a wait-and-watch mode.
The minutes offered no hawkish or dovish surprise, leaving AUD/JPY at the mercy of broader market sentiment.

Omkar Godbole FXStreet Contributor

AUD/JPY is barely moving in response to the minutes from the Reserve Bank of Australia's (RBA) August meeting released at 01:30 GMT.

The currency pair is currently trading at 72.13, up five pips from 72.08 seen before the release of the RBA minutes.

Rates to remain low for an extended period

RBA board would consider a further policy easing, if needed, and would assess developments in domestic, global economies before considering easing, the minutes showed.

The policymakers also expect interest rates to remain low for an extended period and believe the recent slide in the AUD will help exports and tourism.

key points

Risks to economy tilted to the downside in the near term, more balanced further out.
The board reviewed the experience of developed nations with unconventional monetary policy.
Few signs of inflationary pressures emerging, downside risks to some CPI components.
The escalation in China-US trade dispute a downside risk to global growth.
Further monetary easing "widely expected" around the world.

All-in-all, the minutes confirmed the RBA's easing bias and the fact that it is now on a wait-and-watch mode. The central bank left rates unchanged at 1.00% on Aug. 6.

With the minutes offering no hawkish or dovish surprises, the AUD pairs are at the mercy of the broader market sentiment. It is worth noting that the US stocks put on a good show on Monday with the S&P 500 index rising 1.21%.

Hence, the anti-risk JPY may come under pressure during the day ahead, helping AUD/JPY eke out gains.

Pivot points

1. R3 72.64
2. R2 72.47
3. R1 72.3
PP 72.13
1. S1 71.96
2. S2 71.79
3. S3 71.62

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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