Against a backdrop of yen strength, AUD/JPY and NZD/JPY traded softly. Comments by RBA Deputy Governor Hauser on inflation risks suggested the possibility of further rate hikes, but the recovery from the morning's losses did not last. Markets are also focused on this week's economic data, with the direction potentially changing depending on employment and wage results from Australia and New Zealand.
The Australian dollar was slightly soft against the US dollar and traded weakly against the yen as selling emerged, despite the dollar weakening. It was briefly bought back from around US$0.7070 in the morning to around US$0.7086, but set a new low of US$0.7067 in the afternoon.
The New Zealand dollar also came under heavy selling in the morning, falling from the 0.588 range to 0.5861. It subsequently traded around 0.5870.
AUD/JPY remained soft under the influence of yen buying, falling from around ¥113.15 in the morning to ¥112.55. There was a bout of Australian dollar buying following Hauser's comments, but yen buying pressure offset it, limiting the upward move.
NZD/JPY fell sharply in the morning as its decline against the US dollar coincided with yen buying, dropping from the ¥93.90 range to around ¥93.45. Subsequent buying of the New Zealand dollar against the US dollar curbed the decline, but the pair was pushed back toward its lows again in the afternoon.