The Expert Take: AUD/JPY Analysis
AUD/JPY Declines to 94.25 in Early European Session
- Current Situation: AUD/JPY is down 0.18% on the day, trading near 94.25.
- Reasons for Decline: Stronger Japanese Yen (JPY) and anticipation of a hawkish Bank of Japan (BoJ) interest rate decision.
The AUD/JPY cross continues its downward trend, hovering around 94.25 during the early European session on Monday. The Japanese Yen (JPY) has strengthened, and expectations of a potential interest rate hike by the Bank of Japan (BoJ) are putting pressure on the cross.
BoJ Interest Rate Decision Impact
- Forecast: BoJ not expected to raise rates in September but economists anticipate a hike by year-end.
- Expert Opinion: Junki Iwahashi suggests a cautious approach by the BoJ with rate hikes every six months.
While the BoJ is unlikely to raise interest rates at its upcoming September meeting, a majority of economists foresee a hike before the end of the year. This sentiment supports the JPY and weighs on AUD/JPY. Analysts like Junki Iwahashi predict a gradual pace for rate hikes by the BoJ.
Chinese Economic Concerns
- Impact on AUD: Chinese economic slowdown affects the China-proxy AUD negatively.
Renewed signs of deflation and a sluggish Chinese economy are adding to the pressure on the Australian Dollar (AUD). As China is Australia’s largest trading partner, any negative developments in the Chinese economy tend to weigh on the AUD.
Australian Labor Market Data
- Upcoming Release: Australian employment data to be released on Thursday.
- Expectations: Unemployment Rate steady at 4.2% in August, Employment Change to show a 30.8K rise.
The upcoming release of Australian labor market data could provide a turning point for the AUD. If the data shows stronger momentum, it might support the Aussie and limit further downside for the AUD/JPY cross.
Insights on Australian Dollar (AUD)
Factors Influencing the AUD
- Interest Rates: RBA decisions impact AUD value.
- Chinese Economy: Health of China affects AUD as its largest trading partner.
- Iron Ore Prices: Major export for Australia, influencing AUD value.
- Trade Balance: Positive balance strengthens AUD.
The Australian Dollar (AUD) is influenced by various factors, including RBA interest rate decisions, the Chinese economy, Iron Ore prices, and the country’s Trade Balance. Understanding these factors can provide insights into the fluctuations in AUD value.