The AUD/JPY pair has reached a critical point near 98.00, but will the upcoming Australian labor market data for July drive the pair higher or lower?
Recent global risk-aversion trends have weakened the Japanese Yen, making the Aussie Dollar more attractive to investors. Additionally, the Bank of Japan (BoJ) is expected to raise interest rates to 1% by the end of the year, further adding to the bullish sentiment for the AUD/JPY pair.
However, the key focus is on the upcoming Australian Employment data for July. Expectations are for a lower payroll addition of 26.5K compared to June’s 50.2K, with the Unemployment Rate remaining steady at 4.1%. A weaker labor market could prompt the Reserve Bank of Australia (RBA) to consider interest rate cuts, shifting market expectations.
While the RBA is currently not expected to cut rates this year, recent hawkish comments from RBA Governor Michelle Bullock have raised speculations for rate cuts next year. This uncertainty could impact the AUD’s performance in the near future.
On the other hand, improved market sentiment globally has boosted the Australian Dollar, as fears of a US recession have subsided. This positive market environment continues to support the AUD against the JPY.
Looking ahead, the Japanese Yen’s performance will be influenced by the preliminary Q2 Gross Domestic Product (GDP) data, set to be released soon. Strong GDP growth could lead to speculation of further policy-tightening by the BoJ, supporting the Yen.
In conclusion, the AUD/JPY pair’s movement will be heavily influenced by the upcoming Australian labor data and Japanese GDP figures. Investors should closely monitor these economic indicators to make informed decisions regarding their investments in the forex market.