AUD/JPY STRUGGLES TO EXTEND RECOVERY ABOVE 98.00 AHEAD OF AUSSIE EMPLOYMENT
- AUD/JPY’s upside appears to have stalled near 98.00 ahead of the Australian labor market data for July.
- Fading global risk-aversion has weighed on the Japanese Yen.
- The BoJ is expected to raise its interest rates to 1% by the year-end.
The AUD/JPY pair rises to near 97.87 in Wednesday’s European session. The cross struggles to extend its upside above the immediate resistance of 98.00 as investors have sidelined ahead of the Australian Employment data for July, which will be published on Thursday.
The Aussie Employment report is expected to show that the labor market was added with fresh 26.5K payrolls, lower than June’s reading of 50.2K. The Unemployment Rate is seen steady at 4.1%. Easing labor market conditions would prompt expectations of interest-rate cuts by the Reserve Bank of Australia (RBA) sooner rather than later.
Currently, financial markets expect that the RBA will not reduce its key Official Cash Rate (OCR) this year. Market speculation for the RBA pivoting to interest-rate cuts next year were prompted by RBA Governor Michelle Bullock’s hawkish guidance. Bullock said last week that the central bank is vigilant to inflation risks and interest rates would be hiked further if needed.
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