The AUD/JPY pair is on a bullish streak, gaining momentum for the second consecutive day as it reaches a fresh weekly peak of around 97.00. The rise can be attributed to several factors contributing to the positive traction in the market.
Bank of Japan (BoJ) Deputy Governor Shinichi Uchida’s dovish comments have led to intense selling pressure on the Japanese Yen (JPY). This, coupled with a stable global financial market, has weakened the safe-haven appeal of the JPY and supported the AUD/JPY cross.
On the other hand, the Australian Dollar (AUD) is benefiting from the Reserve Bank of Australia’s (RBA) hawkish stance, which promises to maintain a restrictive policy due to persistent inflation. Additionally, upbeat Chinese import data, showing a 7.2% YoY increase in July, indicates resilient domestic demand and further supports the AUD.
Despite the positive sentiment in the market, concerns about a slowdown in China’s economic growth and geopolitical risks from conflicts in the Middle East may limit the AUD/JPY’s upward potential. Investors should exercise caution before expecting further appreciation in the pair.
Analysis:
The AUD/JPY pair is experiencing a bullish trend driven by dovish BoJ remarks, a positive risk tone, and supportive factors like the RBA’s hawkish stance and strong Chinese import data. However, caution is advised due to potential economic slowdowns in China and geopolitical risks affecting market sentiment.