- AUD/JPY falls as Australian Dollar comes under pressure from weak labor demand.
- Investors await the PBOC’s policy, which will be announced on Friday.
- Expectations of BOJ intervention in the field of currencies are relaxed.
The AUD/JPY pair faced a sell-off following the release of mixed Australian labor market data. The risk barometer falls to around 94.50 and is expected to remain on hold pending the People’s Bank of China (PBoC) interest rate decision, which will be announced on Friday. The PBOC is expected to maintain dovish policy due to persistent deflation risks in China.
The market mood remains pessimistic in a context of worsening tensions in the Middle East, which has curbed demand for risk currencies.
The Australian Bureau of Statistics reported on Thursday that employers added 6,700 employees in September, significantly below expectations and the previous release of 20,000 and 63,300, respectively. For its part, the unemployment rate fell to 3.6%, compared to estimates and the previous publication of 3.7%.
Uninspiring Australian employment data dampens expectations of a new interest rate hike by the Reserve Bank of Australia (RBA) in the remainder of 2023.
Hopes for intervention by the Japanese authorities in the field of currencies are diminishing. The Japanese authorities fear new massive sales of the Yen and blame volatility movements for them. Historically, volatility spikes persist for a few weeks, but the appeal for the Japanese Yen is weak from some sectors due to the Bank of Japan’s adaptation of easy monetary policy. Therefore, the authorities cannot turn the tide against the weak attractiveness for the Japanese Yen supported by expansionary monetary policy.
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.
