- AUD/JPY declines for the third consecutive day, reaching a multi-week low.
- Hawkish comments from RBA’s Bullock bolster the Aussie, providing some support to the cross.
- Expectations of an additional BoJ rate hike in 2024 support the JPY and limit further gains.
The AUD/JPY cross faces selling pressure for the third consecutive day on Thursday, falling to a three-and-a-half-week low during the Asian session. Currently trading just below the mid-96.00s, the pair appears vulnerable to extending this week’s decline from the key 200-day Simple Moving Average (SMA).
The Australian Dollar (AUD) received a slight boost from hawkish remarks by Reserve Bank of Australia (RBA) Governor Michele Bullock, who indicated that the board remains cautious about inflation risks and does not anticipate rate cuts in the near term. However, disappointing Australian Trade Balance data, which showed a surplus of A$6,009 million in July amid a 0.8% decrease in imports and a 7% increase in exports, has limited any significant appreciation.
Additionally, expectations of a Bank of Japan (BoJ) rate hike in 2024, supported by data showing a rise in real wages in Japan for the second consecutive month in July, continue to underpin the Japanese Yen (JPY) and cap the upside for the AUD/JPY cross. BoJ Board Member Hajime Takata also mentioned that the central bank may need to adjust monetary policy further if businesses continue to increase capital expenditure, wages, and prices.
Moreover, the cautious market sentiment enhances the JPY's appeal as a safe haven against the Australian Dollar. This suggests that the AUD/JPY cross is likely to continue its downward trajectory, with the recent recovery from around the 90.00 psychological mark, or the one-year low touched in August, losing momentum.
