AUD/JPY is expected to remain in its recovery phase in the ¥110 range, while market attention is likely to shift this week to the RBA minutes and employment data. Although the pair briefly recovered to the upper end of its recent range last week, movements in long-term interest rates could affect its upside.
AUD/JPY held firm last week, rebounding from lows of around ¥108.70 at the start of the month and recovering to the ¥110 range on the 5th. The pair rose to around ¥110.64 at one point on the 7th, but temporarily fell below the ¥110 range against a backdrop of rising long-term interest rates globally and falling share prices. In Asian trading on the 9th, selling of the dollar and the yen again became predominant, with AUD/JPY trading at around ¥110.45 as of 15:00.
Market attention is focused this week on the RBA minutes (13th) and Australian September employment data (15th). The probability of a rate hike at the next rate-setting meeting on 3 November is estimated at about 30% based on market pricing. The minutes could take a dovish tone, and the Australian dollar could be affected depending on the employment data.
For next week, the expected range is ¥109.000–¥112.000, with the trend likely to remain directionless. Points to watch are the RBA policy rate decision on 13 October, Australian September employment data on 15 October, and movements in share prices in major countries and international commodity prices.