AUD/JPY traces firmer yields around 87.50, Aussie Retail Sales, BoJ’s Kuroda eyed

• AUD/JPY justifies its risk-on mood to grind higher after reversing from one-year low.
• Yields rally as banking fears ease, central bankers remain shy of backing further rate hikes.
• Upbeat Japan data failed to impress sellers amid risk-on mood.
• Australia Retail Sales for February and speeches from BoJ Governor Kuroda and RBA Policymaker Ellis eyed.

AUD/JPY seesaws near 87.50, following a clear rebound from the one-year low, as bulls await the key catalysts from Australia and Japan during early Tuesday. That said, the cross-currency pair cheered firmer sentiment to post the first daily gains in four the previous day.

With the European and the US authorities’ announcements of the extension of emergency lending to banks, the market players took a sigh of relief from the banking sector crisis. On the same line were comments from the central bank officials pushing back the banking crisis concerns and the Silicon Valley Bank (SVB) deal. It’s worth noting that the month-end consolidation could also be held responsible for the AUD/JPY pair’s run-up, especially when it eyes the second monthly fall with above 4.0% loss.

While portraying the mood, Wall Street closed mixed, losing some of the intraday gains in the late hours, whereas yields rebound after a four-week downtrend.

It should be noted that the AUD/JPY pair’s run-up ignored upbeat prints of Japan’s Coincident Index and Leading Economic Index for January, as well as growing chatters of the Bank of Japan (BoJ) exit from the ultra-easy monetary policy.

Looking ahead, Australia’s Retail Sales for February, expected 0.4% versus 1.9% prior, could offer immediate direction to the AUD/JPY pair ahead of a speech from BoJ’s exiting Governor Haruhiko Kuroda. Following that, comments from Assistant Governor (Economic) at the Reserve Bank of Australia, Luci Ellis will be important to watch for clear directions.

Among the key catalysts, talks about the banking crisis and central bank comments will be important for near-term directions.

Technical analysis

AUD/JPY recovery remains elusive unless the quote stays below a three-week-old resistance line, around the 88.00 round figure by the press time.