AUD JPY

I thought we might make it a bit closer to 2025 before the selloff an anticipated selloff on AUD/JPY unfolded. But we're reminded that Trump can make or break sentiment on a whim with his eye now on BRICS countries, which saw AUD/USD fall alongside the FX barometer of risk on Monday.

As AUD/JPY is a classic barometer of risk, we should take note that all is not looking well around current levels. And if AUD/JPY tanks, it’s likely to be followed by risk in general.

If you haven’t heard already, Donald Trump has been elected as President of the United States. flipped the senate and on the cusp of taking the house. A risk-on session ensued, which played nicely for AUD/JPY bulls - who now have 103 in focus.

Stronger EU data and pushback on cuts from ECB sent EUR/USD up to its 200-day MA ahead of risk events. I also assess the trend structures of yen pairs to sort the good from the bad.

Underlying inflation remains uncomfortably high in Australia. With continued strength in hiring keeping labour market conditions tight, it means the prospect for RBA rate cuts in 2024 is now remote. For AUD/USD and AUD/JPY traders, external factors are likely to dictate direction from now until year-end, especially the Federal Reserve rates outlook and US election.

The USD and yields continued to surge following the release of the Fed's beige book. That, alongside a fast-approaching and tight US election race, is prompting Wall Street traders to reassess their exposure. Yet the fallout on ASX 200 futures was limited, and while AUD/JPY might retrace lower we still have an initial target around 102.

Momentum is finally turning higher for AUD/JPY, having found support at the 200-day EMA and 100 handle. We think a move to 102 could is not on the cards. Alongside another dip lower for Nikkei futures.

With Wall Street indices holding up and Australia's strong employment report holding up the Aussie in a weak-yen environment, AUD/JPY looks set for a breaking. Crude oil looks ready for a cheeky bounce too.

Australian unemployment may have risen, but so did all other key metrics including job growth and the participation rate. And that has likely provided a floor for AUD/USD and AUD/JPY over the near term.

It was a strong week for the Yen which was a change-of-pace, as pullbacks in USD/JPY and AUD/JPY were driven by a suspected intervention. The big question now is whether the response to intervention remains the same as we saw in May where it reset the tables for the carry trade to continue to drive.

The Japanese Yen continues to fall even after last week’s threats of intervention. USD/JPY is trading at a fresh 37-year high as EUR/JPY, GBP/JPY and AUD/JPY have all shown considerable strength.

USD/JPY is trading at a fresh 37-year high and today’s breakout happened right at Masato Kanda was threatening to intervene. The big question now is whether the Ministry of Finance still wants to defend the Yen or whether they’ll wait until another big figure trades.

Yen-weakness remains in play and USD/JPY is already trading in some rarified air. But it’s AUD/JPY that’s taken the attention after the breakout to fresh 16-year highs.

A relatively hawkish meeting from the RBA has supported AUD over the past 24 hours, sent AUD/JPY to an 11-year high and made next week's inflation report the more important.

The Bank of Japan hosts a rate decision tonight and the big question is whether they lay the groundwork for another rate hike in July, along with whether they announce a reduction in bond purchases. EUR/JPY is set up for Yen bulls, while GBP/JPY and AUD/JPY could be more attractive backdrops for Yen bears.

USD/JPY printed a doji for the week but elsewhere, Yen weakness remained a driving factor. EUR/JPY, GBP/JPY and AUD/JPY are all nearing key points of longer-term resistance.

With unemployment spiking and broader measures of labour market slack increasing, the risk of strong wages growth sparking renewed inflationary pressures looks to have past.