The AUD/JPY cross is oscillating within a narrow trading range around the 99.00 mark during the Asian session on Friday, remaining close to a two-week low retested the previous day. The current fundamental backdrop appears tilted in favor of bearish traders, supporting the case for an extension of the recent pullback from the 101.20 area—its year-to-date high reached in October.
Data released earlier today points to signs of cooling private consumption in Japan. Combined with Japan’s new Prime Minister Sanae Takaichi’s pro-stimulus stance, this environment could allow the Bank of Japan (BoJ) to resist policy tightening. As a result, traders are holding back from placing fresh bullish bets around the Japanese Yen (JPY), which acts as a tailwind for the AUD/JPY cross.
However, minutes from the BoJ’s September policy meeting, released on Wednesday, have kept hopes alive for an imminent rate hike. Additionally, the generally weaker tone in equity markets is offering some support to the safe-haven JPY, undermining the risk-sensitive Australian Dollar (AUD).
Meanwhile, the disappointing release of Trade Balance data from China suggests weak domestic demand in the world’s second-largest economy amid ongoing trade-related uncertainties. On top of this, the lack of any major hawkish surprise from the Reserve Bank of Australia (RBA) continues to weigh on the China-proxy AUD.
Taken together, these factors validate the near-term negative outlook for AUD/JPY and suggest that the path of least resistance remains to the downside. Some follow-through selling below the 98.80 region, or the weekly trough, would reaffirm the negative bias and could pave the way for a further decline toward sub-98.00 levels.
https://bitcoinethereumnews.com/finance/aud-jpy-steadies-near-99-00-after-chinas-trade-balance-data/
