The AUD/JPY pair experienced a slight decline after the release of mixed economic data from China on Friday. China’s Retail Sales saw a 2.3% increase in April, marking the 15th consecutive month of growth but the slowest gain in this trend. Meanwhile, Industrial Production improved by 6.7% YoY, surpassing expectations. These changes in China’s economy have had an impact on the Australian Dollar, as Australia and China are close trade partners.
The Australian Dollar was already under pressure due to mixed employment figures released on Thursday. Australia’s Wage Price Index increased by 0.8% in the first quarter, falling short of market expectations. Annual pay growth also slowed slightly to 4.1%. These factors have contributed to the decline of the Aussie Dollar in recent trading sessions.
On the other hand, the Japanese Yen faced renewed pressure after the Bank of Japan decided to maintain its bond-buying amounts on Friday. The BoJ’s decision not to make a surprise cut to debt purchasing earlier in the week led to speculation that bond buying could be reduced at the June policy meeting. BOJ Governor Kazuo Ueda also mentioned that there are no immediate plans to sell the central bank’s ETF holdings.
Former BOJ chief economist Toshitaka Sekine suggested that the Bank of Japan could raise its benchmark interest rate up to three times this year. Sekine proposed that the next move could potentially occur as early as June, highlighting the significant room available to adjust the central bank’s current monetary policy settings. These potential interest rate hikes could have implications for the AUD/JPY pair in the coming months.
Overall, the AUD/JPY pair continues to be influenced by economic data from China, Australia, and Japan. The mixed data releases, as well as speculation about potential interest rate hikes by the Bank of Japan, have led to fluctuations in the currency pair. Traders will be keeping a close eye on upcoming economic reports and central bank decisions to gauge the future direction of the AUD/JPY pair. As market dynamics evolve, it is essential for traders to stay informed and adaptable to changes in order to navigate the forex market successfully.
