Audjpy Recovers From Monthly Lows

Audjpy Recovers From Monthly Lows by Adam Rosen last updated on February 11, 2024

Aud/Jpy Close To 96.80, Recovers From Monthly Lows

AUD/JPY continues on a bullish path as the recovery phase from 2-month lows continues after touching a low of 95.50. The pair has gained considerable ground and can be seen near the 96.80 handle on Friday.

The improved sentiment surrounding the Australian Dollar (AUD) is due to the bullish money market in Australia. So, when we look at the reasons for a bullish AUD/JPY, that's also notable!

The PPI release from Australia was also higher than forecast, which has also provided strength to AUD/JPY.

Australia'S Ppi Was 4.1% For Q4

According to the Australian Bureau of Statistics, the PPI during the 4th quarter was 4.1%, higher than the previous reading of 3.8%. After the release of the data, the AUD/JPY refreshed monthly highs once again, which shows that JPY is having a hard time against the AUD.

few days earlier, a group of economists shared a forecast that the interest rate would be maintained at 4.35% during the next meeting. In addition, a member of the RBA also hinted that interest rates will remain at the current levels for an extended period.

However, this doesn't mean all is good with the AUD, as it also faces numerous challenges. According to the bond traders, there's now a greater chance of early rate cuts by the RBA. Similarly, the futures markets look forward to a 0.50% rate cut in 2024 alone.

Conversely, the Bank of Japan is also preparing for a hawkish policy. When we combine all of this with the tensions in the Middle East, it becomes clear that JPY can quickly get in demand again. That's the primary reason why any more advances in the AUD/JPY are still limited.

Looking ahead, the policy divergence of the RBA and the BOJ will remain the key theme for the AUD/JPY traders.