- AUD/JPY retraces its recent gains on risk-off sentiment on Wednesday.
- JPY could have received some support from the fear of intervention by Japanese authorities.
- Australian Dollar weakens as the ASX 200 Index extends losses.
AUD/JPY edges lower to near 98.70 during the European session on Wednesday. The prevailing risk-off sentiment bolsters demand for the safe-haven Japanese Yen (JPY). Moreover, investors are exercising caution amidst speculation that Japanese authorities may intervene in the markets to prevent a notable depreciation of the Yen.
Despite this, the Bank of Japan's (BoJ) cautious approach towards further policy tightening failed to kindle bullish sentiment or generate significant momentum. Although the Japanese Yen (JPY) encountered difficulties in sustaining its strength in the current market environment.
The Australian Dollar (AUD) faces difficulties attributed to the decline in the ASX 200 Index, consequently exerting downward pressure on the AUD/JPY cross. However, the Australian Industry Group (AiG) Industry Index displayed improvement in February, rising to a reading of -5.3 from the previous -14.9. Similarly, the AiG Manufacturing PMI recorded -7, compared to the prior reading of -12.6.
In the Reserve Bank of Australia (RBA) March minutes, the board indicated that they did not consider the option of raising interest rates. Despite acknowledging the uncertain economic outlook, the board perceived the risks to be generally balanced. Additionally, the board highlighted that it would take "some time" before they could express confidence in inflation returning to the target level.
Additionally, Westpac's summary of the Reserve Bank of Australia (RBA) March meeting minutes stated the current cash rate level is deemed appropriate for the prevailing circumstances, although conditions are subject to potential changes in the future.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD keeps the red near 1.0500 amid market caution ahead of US CPI
EUR/USD holds losses near 1.0500 in the European session on Wednesday. The pair faces headwinds from a cautious market mood and resurgent US Dollar demand, as traders expect an uptick in the US inflation data that could impact the Fed's easing trajectory while the ECB remains on track for more rate cuts.
GBP/USD drops below 1.2750, awaits US inflation data
GBP/USD is back in the red below 1.2750 in European trading on Wednesday. The Pound Sterling loses traction amid renewed US Dollar buying as risk sentiment worsens heading into the key US CPI showdown. The US inflation data is key to gauging the pace of Fed's future rate cuts.
Gold price steadies below $2,700 as traders seem reluctant ahead of US inflation data
Gold price seems to have stabilized following good two-way intraday price swings and currently trades around the $2,690 area, below a two-week high touched earlier this Wednesday. Expectations that the Fed will adopt a cautious stance on cutting rates continue to push the US Treasury bond yields.
US CPI set to grow at faster pace in November, edging further away from Fed target
The US Consumer Price Index report for November, a key measure of inflation, will be unveiled at 13:30 GMT by the Bureau of Labor Statistics. Markets are buzzing in anticipation, as the release could trigger significant swings in the US Dollar and influence the Federal Reserve's plans for interest rates in the months ahead.
How the US-China trade dispute is redefining global trade
Since Donald Trump took office in 2017, trade flows and market shares have changed substantially. We think that shift is set to continue under looming tariffs and a new protectionist environment.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.