- AUD/JPY is struggling around 90.40 but upside remains favored on satisfactory aussie Retail Sales.
- The Retail Sales have landed at 0.9% as expected by the market participants.
- BOJ’s Kuroda seeks wage hikes to keep inflation at desired levels.
The AUD/JPY pair has touched a high of 90.54 in the Asian session after the Australian Bureau of Statistics reported the Retail Sales. The economic data has come in line with the forecasts of 0.9% but lower than the prior print of 1.6%. An aligned Retail Sales data with the preliminary estimates have underpinned aussie against the Japanese yen. Despite soaring inflation and tightening monetary policy, the economy has managed to report decent Retail Sales.
The antipodean is also performing better against Tokyo on active risk-on impulse. Positive market sentiment has strengthened the risk-perceived currencies.
Investors are betting on more rate hikes by the Reserve Bank of Australia (RBA) as mounting inflationary pressures are complicating the situation for the households. Firing oil and commodity prices are affecting the real income of the households and eventually posing challenging tasks for RBA policymakers.
On the Japanese yen front, Japanese Prime Minister Fumio Kishida urged the Bank of Japan (BOJ) on Thursday that the BOJ should make some efforts to achieve the targeted inflation rate of 2%. In response to that, BOJ’s Governor Haruhiko Kuroda has commented that the price rise should be accompanied by wage hikes in to sustain inflation at desired levels. The Japanese yen performed well this week on upbeat Purchase Managers Index (PMI) data. The Manufacturing PMI landed at 53.2, against the forecasts of 52 while the Services PMI was recorded at 51.7, higher in comparison with the estimates of 50.6.
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