AUD/JPY Nears 94.10 as Markets Anticipate Australian Jobs Data and Japan’s CPI Release

• The AUD/JPY recovered its losses due to the fall in US bond yields.
• Reuters Tankan released the quarterly survey that shows the sentiments of Large Manufacturing and Non-Manufacturing have increased.
• The market speculates on a Japanese intervention to protect the Yen.

AUD/JPY traded at a higher level of 94.10 in the early European trading hours on Wednesday. The pair is recovering from the loss recorded on Tuesday, and the resiliency that the Australian Dollar (AUD) is potentially due to the fall in US bonds’ yields.

However, China’s declining economic outlook raises fears of a possible decrease in the demand for Australian exports, like goods and commodities. This recession in the economy can affect the sentiment of investors and result in a reduction in consumption of the Aussie.

On the other side, Reuters Tankan unveiled its quarterly survey of the business climate of Japanese firms. This data is a boost to that of the Japanese Yen (JPY) because both Large Manufacturing and Non-manufacturing sentiments have increased. In particular, the Large Manufacturing sentiment index has been elevated up to 12 in August, up from +3 in July. Similarly, the sentiment for non-manufacturing has increased, with the reading as 32 in August, a rise from the +23 reported in July.

Additionally, there is speculation on the market regarding the possibility of Japanese authorities intervening to protect the Japanese currency from being a victim of the US Dollar (USD), like in September of 2022. It could play an important part in the price movement of AUD/JPY.

Positive Japan’s Gross Domestic Product (GDP) figures announced Tuesday also helped the Yen. This outlook could be reinforced by the statement made by the Finance Minister of Japan, Shunichi Suzuki. Suzuki stated that “rapid movement is not desirable and suggested the state is ready to react appropriately, according to reports by Reuters.

Market participants will pay close attention to the upcoming data release scheduled for Thursday. Based on the Australian business calendars, the main focus will focus on Employment Change s.a. and unemployment rates for July. Also, attention will be paid to Japan’s National Consumer Price Index data due, which will be announced on Friday. These information points are expected to provide important information about the economic condition of the respective countries. They could influence the trading choices in the AUD/JPY currency pair.