AUDJPY will be in focus on Tuesday morning with jobs data and retail sales ahead.
The price of the AUDJPY exchange rate is trading at 99.31 after finding resistance at the 100 level on two occasions since September. That will be an important level and further weakness could retest the support at 94
The data starts at 8:30 am HKT with Japanese unemployment data. Strong employment and wage rises would pressure inflation and add potential for further rate hikes in Japan.
That will be followed at 9:30 and 10 am HKT data in the form of Australian retail sales and inflation. The Reserve Bank of Australia has been slower to cut interest rates as inflation remains stubborn down under. Tuesday’s data will conclude the high-level data for the week in this pair and could guide price into the weekend.
All of Australia’s big four banks are now projecting an interest rate cut by mid-February, after NAB moved its forecast. NAB had expected rate cuts in May 2025 but have now brought it forward by three months.
The Bank of Japan’s board members are split over their own monetary policy, meetings of the recent meeting showed.
The BOJ held short-term interest rates steady at 0.25% at its two-day meeting but noted improving domestic conditions, which will allow for the unwinding of years of extraordinary monetary stimulus.
“Private consumption has been on a moderate increasing trend despite the impact of price rises and other factors,” the Bank of Japan said.
“Japan’s real interest rates remain extremely low. If our economic and price forecasts are achieved, we will raise interest rates and adjust the degree of monetary support accordingly,” Governor Kazuo Ueda said.
Shigeru Ishiba won a Japanese prime ministerial election on Friday and investors are concerned that further rate hikes and FX interventions may be on the way. Ishiba said he would clean up the Liberal Democratic Party (LDP), revitalise the economy and address security threats.