Aug 17, 2023

The AUDJPY currency pair is expected to be influenced by economic data, with Australian employment figures due out before the market opens on Wednesday and Japanese inflation figures due out the following day.

AUDJPY – Daily Chart

AUDJPY – Daily Chart

AUDJPY has depreciated over the last month as the Reserve Bank of Australia (RBA) paused its rate hikes. The pair is currently trading at 94, with support 100 pips below and a potential test of that level coming this week.

The Australian economy is projected to add fewer jobs, from 32.6k to 15k. The unemployment rate is also expected to rise to 3.6% from 3.5%. The Australian Bureau of Statistics stated that the June unemployment rate of 3.5% was a significant accomplishment.

The Reserve Bank of Australia (RBA) has raised interest rates to 4.10% in response to a strong labour market and rising inflation, but has recently paused. The RBA also closely monitors the labour market, which is important to traders as an indicator, as price rises have slowed.

If the figure comes in near the expected 15k mark, the RBA is unlikely to take action, and the Aussie dollar is likely to dip again.

The Japanese economy will release its latest inflation report after the Asian session on Wednesday. Traders expect the figure to be 2.5%, down from 3.3% last month. However, with GDP coming in much higher than expected, it is possible that prices were under some additional upward pressure.

Japan’s economy performed strongly in the April-June quarter, with healthy auto exports and tourist arrivals offsetting a weaker global economy. However, there are still recession risks looming around the world, and some added pressure on Chinese property, which could give the yen a safe-haven boost.

The current trend suggests that the AUD/JPY exchange rate is likely to fall further, but data over the next two days will confirm this. If Japanese prices rise more than expected, it could even lead to speculation that the Bank of Japan will tighten monetary policy.

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