Australian Dollar firms against Japanese Yen following China’s RatingDog Manufacturing

AUD/JPY holds ground as mixed economic data from China, Australia, and Japan shaped market sentiment.
China’s RatingDog Manufacturing PMI fell to 51.8 in May, slowing down but beating expectations of 51.4 to show resilience.
Japan’s May Manufacturing PMI declined to 54.5 from April's peak, but still signaled expansion through steady output growth.

Akhtar Faruqui FXStreet

AUD/JPY extends its gains for the third successive day, trading around 114.60 during the Asian hours on Monday. The currency cross holds its ground as a wave of mixed economic data from China, Australia, and Japan shaped market sentiment.

China’s RatingDog Manufacturing Purchasing Managers Index (PMI) slipped to 51.8 in May from the previous month's 52.2 reading. While this indicates a slight deceleration in expansion, it still managed to beat market expectations of 51.4, offering a layer of resilience to the regional outlook.

In Australia, the labor market showed signs of recovery as the ANZ–Indeed Australian Job Ads rebounded by 1.8% month-on-month (MoM) in May, marking the first gain since February and bouncing back from a 0.6% decline in April. However, the overarching trend continues to suggest that labor demand is gradually moderating as elevated borrowing costs weigh on broader economic activity.

Meanwhile, price pressures eased significantly, with Australia’s TD-MI Inflation Gauge dropping 0.3% month-on-month in May, completely reversing the previous month’s 0.6% increase to mark its first decline since February.

Over in Japan, the final S&P Global Japan Manufacturing PMI was confirmed at 54.5 for May 2026, matching preliminary estimates. Although this is down from April’s peak of 55.1, which was the highest since January 2022, the latest reading still signals expansion, albeit at a slower pace, supported by steady output growth.

On a weaker note, Japanese corporate Capital Spending flatlined in the first quarter, missing market expectations and marking a sharp deceleration from the 6.5% year-on-year growth seen in the final quarter of 2025.

Looking ahead, the AUD/JPY cross faces a potential cap on further upside due to shifting market dynamics. Persistent expectations that Japanese authorities will intervene to prop up the Japanese Yen are keeping JPY bears from placing aggressive bets, keeping the AUD/JPY cross relatively restrained.

Economic Indicator

RatingDog Manufacturing PMI

The RatingDog Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.

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