AUD/JPY steady in early Asia on 74 handle waiting key data events

• AUD/JPY holds its own despite a poor fundamental backdrop.
• Key data from both Australia and China have the potential to kick up some dust.

AUD/JPY has been capped by the declining 200-day moving average but maintains a bullish tendency on the charts, despite the negative fundamental backdrop. The cross is currently steady on the 74 handle in a tight range in quiet markets. 

While markets await the release of the November Australia business confidence survey from NAB which is due at 11:30am Syd/8:30am Sing/HK, the Chinese trade data from the weekend remains a horn in the side of the bulls and with the 15th December deadline fast approaching at the end of his week, risk appetite is likely to be subdued which should be a wight for the cross. 

Key data on the horizon

Today's data does have the potential to kick up some dust though, with the business confidence headline in focus – the index was +2 in Oct while the conditions index was at  +3. "The long term average for both is around +6, so the business mood is soft but not dramatically weak.

The conditions index tends to have the best correlation with economic activity," analysts at Westpac explained. With respect to the Reserve Bank of Australia, the markets are pricing a 65% chance of easing at the Feb RBA meeting, which should also keep a lid on the Aussie. 

We also have the Inflation data from China today which has not been a barrier to monetary easing in China if needed, with CNY fragility the bigger concern, as analysts at Westpac pointed ut. "At 12:30pm Syd/9:30am local, Nov Consumer Price Index is seen bouncing to 4.3%yr from 3.8%yr but this is due to a surge in food prices, especially pork. Non-food inflation was only 0.9%yr in Oct. Nov PPI is also due."

AUD/JPY levels