AUD/JPY back to two-week’s high ahead of Australian Retail Sales.
- Australian Retail Sales and Building permits data coming up at 1:30 GMT on Wednesday.
- The Reserve Bank of Australia leaves interest rates unchanged at 1.5%.
The AUD/JPY is trading at around 81.82 up 0.84% on Tuesday as concerns about a trade war between China and the US eased. The Japanese yen decreased in value against most currencies as it lost its safe-haven appeal.
Coming up in Australia on the macroeconomic front is the Retail Sales data in February and Building Permits at 1:30 GMT on Wednesday.
Overnight the Reserve Bank of Australia left interest rates unchanged at 1.5% as it was widely expected. However, the RBA said that global monetary tightening was to be expected and commented: "As conditions have improved in the global economy, a number of central banks have withdrawn some monetary stimulus and further steps in this direction are expected," but added, as usual, that they won't follow the same path.
Earlier in Asia, "the Bank of Japan Governor Kuroda said that he cannot say now how and at what pace it will shrink balance sheet, raise rates,” wrote Mario Blascak, Chief Analyst at FxStreet in his daily American FX Outlook.
Meanwhile earlier in the week, the Bank of Japan’s Tankan Large Manufacturing Index, for the first quarter of 2017, fell to 24 from 26 seen in previous readings; analyst where expecting 25. It is its first decline since the first quarter of 2016. All major sectors were hit: food, textile, chemicals, paper and metals. Tankan’s first quarter non-manufacturing indicator came out below expectations at 23 versus a 24 forecast. Construction, wholesale trade, rental, transport and information services where hit the most.
AUD/JPY weekly chart
The AUD/JPY is currently in a bear leg since the start of 2018. The AUD/JPY is trading in a two-week consolidation pattern between 80.50 and 82.
AUD/JPY daily chart
The bulls managed to bring the AUD/JPY cross back close to 82. A break above the level would see the cross reach the 82.50 swing high followed by the 83 figure. On the flip side, supports are seen at the 81 figure and 80.50 cyclical low.