- AUD/JPY oscillated between 82.00 lows and 83.00 lows on Tuesday, hit by safe-haven flows and rising global commodity prices.
- While the escalation of the Russia/Ukraine crisis will remain a key factor, Australian traders will also be keeping an eye on upcoming WPI data on Wednesday.
The AUD/JPY has been choppy on Tuesday, hovering between lows not much above 82.00 and session highs north of the 83.00 level. On the one hand, rising geopolitical tensions as the Russia-Ukraine crisis continues to escalate has put pressure on the pair as market participants seek safe-haven assets such as the yen. On the other hand, geopolitical tensions are contributing to upward pressure on global commodity prices, favoring the Australian dollar, which is dependent on commodity exports. Currently trading at 82.80, the pair is trading 0.5% daily gains as traders continue to monitor geopolitical developments ahead of the release of Q4 Australian WPI figures during the Asia Pacific session. on Wednesday.
The data, if better than expected, could encourage the RBA to change its policy stance in a more aggressive direction at a faster pace. The RBA has so far only admitted that a first rate increase may happen before the end of the year and stressed that they are willing to be patient, implying that any such increase would come towards the end of the year. Higher WPI figures could encourage moving forward on that timeline, which could provide tailwinds for the Aussie. Otherwise, the data calendar is quite thin this week for AUD and JPY, so geopolitics and risk appetite will remain in the driver’s seat.
Technical levels
Source: Fx Street
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