AUD/JPY: Under pressure following overnight losses on Wall Street weigh
- AUD/JPY drops as risk sentiment sours and lifts Japanese yen.
- US stocks dropped on Monday on virus concerns and US-China tensions.
- Upbeat Aussie data restrict losses in AUD/JPY near 74.35.
The anti-risk yen is drawing bids during Tuesday’s Asian trading hours and pushing AUD/JPY lower. The pair is currently trading at 74.38, representing a 0.11% drop on the day.
Risk sentiment sours
The US stocks fell on Monday, with the S&P 500 losing almost 1%, on concerns the rising number of new coronavirus cases were stalling reopening plans in California. Additional bearish pressure stemmed from an increase in tensions with China.
As per the latest reports, the US administration has rejected China’s maritime claims in the South China Sea.
And yet the risk-off tone in the US equities and the US-China tensions may not be the only reason for the decline in the AUD/JPY. The number of new cases in Australia are also rising and could be weighing over the Aussie dollar.
So far, however, the downside has been restricted near 74.30, possibly due to the upbeat Aussie data released at 01:30 GMT. National Bank of Australia’s Business Confidence rose to 1 in June from the previous month’s print of -20. Similarly, the Business Conditions Index jumped to -7 from -24.
Looking forward, the US-China tensions and the lingering virus concerns may keep equities on the defensive and the yen better bid. At press time, however, the futures tied to the S&P 500 are reporting a 0.15% rise.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
