The AUD/JPY pair is facing a second consecutive day of losses, currently trading around 97.50 during the European trading hours on Wednesday. The decline in AUD/JPY can be attributed to the strengthening Japanese Yen (JPY) following the release of the Jibun Bank Services PMI data. Japan’s Services PMI came in at 53.7 in August, slightly below the estimated 54.0, marking the seventh straight month of expansion in the service sector.
Chief Cabinet Secretary Yoshimasa Hayashi of Japan emphasized the need for close coordination between fiscal and economic policy management with the Bank of Japan (BoJ). Hayashi is closely monitoring market developments both domestically and internationally with a sense of urgency.
On the other hand, the Australian Dollar (AUD) is extending its losses after Australia’s Gross Domestic Product (GDP) reported a 0.2% increase in QoQ for the second quarter, falling short of the expected 0.3% readings.
Furthermore, China’s Services Purchasing Managers’ Index (PMI) dropped from 52.1 in July to 51.6 in August, which is significant given the close trade ties between China and Australia. Bank of America (BoA) has revised its economic growth forecast for China, projecting a lower growth rate of 4.8% for 2024 compared to the previous estimate of 5.0%.
Analysis:
The current market dynamics suggest a bearish trend for AUD/JPY as the Japanese Yen strengthens and economic indicators from both Japan and Australia show mixed results. Investors should closely monitor central bank policies and economic data releases to make informed decisions about their investments in the forex market. The ongoing developments between China and Australia also play a crucial role in shaping market sentiment and currency movements. Stay updated with the latest news and market analysis to navigate through these uncertain times in the financial markets.