- The AUD/JPY pair is trading at 98.49, registering a daily decline of 0.10% in Tuesday's session.
- The Japanese Yen strengthens, boosted by the unexpected rebound in the January CPI in Japan.
- There is speculation about a change in the Bank of Japan's monetary policy, although disinflationary pressures persist.
The AUD/JPY pair is trading at 98.49, which is a slight drop of 0.10% on Tuesday's session. This slight decline is observed amid the strengthening of the Japanese Yen, attributed to the rise in the Japanese Consumer Price Index (CPI) during the month of January.
In that sense, Japan's latest national CPI figures for January indicated a slight increase above expectations. The headline inflation rate was reported to have risen 2.2% (year-on-year), compared to a forecast of 1.9%, and down from 2.6% in December. The core inflation rate, which excludes fresh foods, stood at 2.0% year-on-year, meeting forecasts of 1.9% and declining from 2.3% the previous month. After the numbers were released, both the yen and the Japanese government bond (JGB) yield surged, with the 2-year yield hitting its highest point since 2011, as markets renewed hopes for an early lifting of bonds. the Japanese banking authority. However, it is worth mentioning that inflation continues to trend downward, suggesting that the Bank of Japan (BoJ) has room to maintain a cautious approach towards policy normalization. At the moment, the markets are preparing for a takeoff in June, but the bank could delay it even further.
On the daily chart, the Relative Strength Index (RSI) is predominantly moving in positive territory, highlighting a fair control by buyers over the market direction. Despite some of its negative slope, the pair remains in the positive zone, signaling that the bulls remain in control.
Simultaneously, the decline of the green bars on the moving average convergence (MACD) histogram denotes a decline in positive momentum. Buyers, although active, are gradually losing ground, encouraging caution on the part of bulls. However, the pair remains above its main 20,100 and 200-day SMA, suggesting that the overall trend remains bullish, and the mentioned downward moves could be considered consolidation.
AUD/JPY daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
