AUD JPY

With wage growth slightly above expectations yesterday, a strong employment report could have seen further calls for RBA to hike in June. Only, employment was softer.

Quarterly inflation figures for Australia back up hopes that peak inflation has indeed arrived, which could keep the RBA on track for another pause next week.

The Japanese yen has surged higher during today’s Asian session, suggesting the end of fiscal year repatriation trade is in play.

The government’s recent 2023 growth target of ‘around’ 5% seems to be on track according to the NBS, which helped commodity FX and indices rise during the Asian session.

A weak lead form Wall Street weighed on the Aussie overnight, with today’s employment miss adding to its downside pressure.

There were high expectations from the BOJ at today’s meeting, yet what they delivered was a nothing burger. That is classic BOJ!

The yen was the strongest currency overnight as traders reacted to weak manufacturing PMI data over the weekend, and the potential for the BOJ to adjust their policy.

AUD/JPY and NZD/JPY formed bullish engulfing candles today, trading to their highest levels since 2015.

As daunting as a 75-bps hike may seem, it could be argued that if they didn’t hike so aggressively today then they’re still not doing enough to fight inflation.

if one does not have access to RBOB, a highly correlated yen pair is another option for traders

The RBA didn’t hold back and opted for a 50-bps hike at today’s meeting, which is a first since February 2000.

European index futures have opened higher, suggesting sentiment remains buoyant after Friday’s rally. And that could bode well for a potential breakout on AUD/JPY.

Concerns that the US is headed for stagflation weighed on sentiment yesterday, which has placed AUD/JPY back onto our bearish watchlist.

Given US indices are holding support levels after the latest selloff, a soft inflation print could be the catalyst to lift equities from their lows.