- AUD/JPY is expected to re-test 92.00 but is inside the woods following cues from AUD/USD.
- Investors are awaiting China’s inflation data for fresh impetus.
- It seems that few days of sunlight left for the ultra-loose monetary policy approach in Japan.
The AUD/JPY pair is struggling to come out of the woods as investors are awaiting the release of China’s Consumer Price Index (CPI) data for fresh impetus. The risk barometer has shifted sideways around 91.50, following footprints of AUD/USD ahead of the release of the United States inflation data.
According to the estimates, annual CPI (Dec) is set to improve to 1.8% from the former release of 1.6%. While the monthly figure may contract by 0.1% against the prior release of -0.2%. Also, the Producer Price Index (PPI) could contract by 0.1%. The Chinese economy is operating at lower inflation levels after remaining locked for a lengthy period due to the Covid-19 epidemic. This might force the People’s Bank of China (PBOC) to announce some policy-easing measures to spurt the level of economic activities.
On Wednesday, the cross turned sideways after a bullish action supported by the release of the higher-than-projected Australian inflation and upbeat Retail Sales data. The monthly price index (Nov) in the Australian economy landed at 7.4% vs. the consensus of 7.3% and the former release of 6.9%. Apart from that, monthly Retail Sales (Nov) jumped to 1.4% against the projections of 0.6%.
Stronger-than-anticipated inflation and retail demand by households are going to compel the Reserve Bank of Australia (RBA) to continue hiking interest rates further to tame soaring inflation. Currently, the Official Cash Rate (OCR) of the RBA is at 3.10%.
On the Tokyo front, Michio Saito, Director-General of the Financial Bureau at Japan’s Ministry of Finance (MoF), said in a statement early Wednesday, “interest rates remain low but the current situation won’t last indefinitely.” Japanese administration and the Bank of Japan (BoJ) are looking to review their decade-long ultra-loose monetary policy to conclude deflation and an easy policy approach.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
