The AUD/JPY cross is on an upward trend, hitting a new weekly high during the Asian session. Despite better-than-expected Chinese inflation figures, the bulls are not impressed and fail to gain momentum, while geopolitical risks and BoJ rate cut bets support the JPY and limit gains for the cross.
With the RBA’s hawkish stance and positive equity market sentiment boosting the AUD, the JPY remains strong on speculation of a BoJ interest rate hike. The recent Chinese inflation data showed a 0.5% increase in July, higher than expectations, but the PPI continues to decline.
While the AUD/JPY cross may have formed a near-term bottom, it is essential to monitor the market for further confirmation. The focus now shifts to upcoming economic indicators like the Australian Wage Price Index and monthly jobs report.
Analysis:
The AUD/JPY cross is influenced by various factors, including central bank policies, economic data, and market sentiment. Traders should pay attention to upcoming reports to make informed decisions. The recent uptick in the cross could signal a shift in market dynamics, but caution is advised until further confirmation is received.