- The RBA remain cautious, rate hike is likely to be delayed.
- AUD/JPY trades at 83.00 amid mixed market views.
- AUD/JPY looks for impetus from broad market sentiments.
AUD/JPY is maintaining its position at around 83.00 during the Asian session on Friday. At the time of reporting, the cross-currency pair is trading at 83.16, up 0.07%.
Due to the COVID-19 lockdowns paired with slow economic recovery, the Australian economy is going through a challenging phase. In addition to this, the data released earlier this month have failed to make investors happy.
Furthermore, the Reserve Bank of Australia (RBA) has issued a warning on rate hikes. The RBA policymakers have constantly been cautioning investors that the much-anticipated rate hike will not be announced anytime soon. As a result, the Australian dollar has suffered throughout this period.
On November 16, RBA Governor Philip Lowe said, “the economy and inflation would have to turn out very differently from our central scenario for the Board to consider an increase in interest rates next year. It is likely to take time to meet the condition we have set for an increase in the cash rate and the Board is prepared to be patient.”
However, the latest news coming out from Australia about the lift of Covid-19 lockdowns in Victoria will surely provide a much-needed boost to the economy in the upcoming Q4. This is similar to Japan’s population that has overcome previous vaccine hesitancy and has achieved the highest inoculation rate in the Group of Seven (G7) without any mandates. It need not be said this will have a positive impact on the risk-sensitive pair.
On the other hand, shareholders of the Japanese Yen remain cheerful about the COVID-19 fiscal stimulus package. The aid is worth 40 trillion yen ($350 billion) and is expected to revive the pandemic and oil price-hit economy.
It is worth stating the instability in the bond market has, but the market is under caution. Previously, a pullback in the US treasury yields has pushed the USD/JPY southwards, resulting in an improvement in the local currency Yen. On Friday, the 10-year US Treasury yield stands at 1.58%, rebounding while the 30-year around 1.97%.
Investors will recollect, the USD/JPY is under pressure caused by declining US inflation pressures and rising rate hike expectations.
Amid no economic docket on Friday, the pair will AUD/JPY traders would be leaning on broader market risk sentiment dynamics to find impetus.
AUD/JPY technical levels
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