AUD/JPY aims to print a fresh seven-year high around 100.00, Aussie employment in focus
- AUD/JPY is aiming to strike the psychological resistance of 100.00 on wider RBA-BOJ policy divergence.
- Australian employment data is expected to display a decent performance ahead.
- Japan’s officials are worried about the depreciating yen and are expected to intervene in Fx moves.
The AUD/JPY pair printed a fresh seven-year high around 98.40 on Monday and is expected to accelerate its gains towards the psychological resistance of 100.00 sooner. The risk barometer has remained in the grip of bulls and will continue its upside momentum on wider Reserve Bank of Australia (RBA)-Bank of Japan (BOJ) policy divergence.
A spree of rate hikes by RBA Governor Philip Lowe to scale down the price pressures kept the aussie bulls in a bullish trajectory. The RBA has already raised its Official Cash Rate (OCR) to 2.35% and will scale up the interest rates to 3.85%, as discussed while delivering guidance. Also, the inflation rate is expected to top around 7%.
This week, the Australian economy will report the employment data, which will be of utmost importance. The Unemployment Rate is expected to remain steady at 3.4%. While the Employment Change is expected to display an addition in total payrolls by 35k. A release of upbeat Australian employment data will strengthen the aussie dollar further.
Apart from that, the Australian Consumer Inflation Expectations data will be keenly watched. The inflation indicator is expected to escalate dramatically to 6.7% vs. the 5.9% figure recorded earlier. This may force the RBA to keep up the rate hike spree.
On the Tokyo front, investors are awaiting the release of the Industrial Production data. The economic data is seen as stable at -1.8%. This may weaken the yen bulls further. The market participants are looking for more build-up on intervention in Fx moves by Japan. Earlier, Japanese officials cited that fundamentals are not so worse in relation to the extent of depreciation in yen. The economy is communicating with other nations to discuss the same subject.