AUD/JPY has rebounded from the 109-yen range in early August to recover to the 113-yen range. This week, depending on the results of the wage index on the 19th and employment data on the 20th, the pair could break above ¥114.66 and test ¥115.
AUD/JPY fell from late July through early August, reaching a low of around ¥109.24, but buying subsequently returned, lifting the lows and bringing the pair back to the 113-yen range. On the daily chart, it has broken above the ¥113 area, and a break above ¥114.66 is being watched as the next upside target.
The Reserve Bank of Australia (RBA) left its policy rate unchanged at 4.35% at its August monetary policy meeting, but continued to leave open the possibility of an additional rate hike. The market expects the outlook for further rate hikes could strengthen depending on wage and employment trends.
Japan’s real GDP for the April-June quarter maintained positive growth, rising 0.3% from the previous quarter, but the weakness in domestic demand stood out, with a contribution of -0.2 percentage points. Private consumption declined slightly, while business investment also fell.
If AUD/JPY breaks above ¥114.66, ¥115 will come into view, while a renewed sharp decline remains a risk depending on the yen’s movements. The balance between expectations for a Bank of Japan rate hike and inflationary pressure from yen depreciation and surging resource prices will determine the pair’s direction going forward.