AUD/JPY pops and drops on Australian Inflation beat
27.04.2022, 02:03

AUD/JPY pops and drops on Australian Inflation beat

  • AUD/JPY pops to 91.46 on upbeat Australian data, then retreats.
  • Improving risk tone and higher USD/JPY keep AUD/JPY afloat.
  • US dollar remains firmer on the session, capping aussie’s upside.

AUD/JPY’s recovery mode took a pause just shy of 91.50 after the Australian Inflation data bettered expectations, knocking down the cross back towards 91.00.

Although a better market mood is seen limited the pullback in the pair, as the S&P 500 futures add 0.29% on the day.

AUD/JPY is snapping its four-day downtrend, looking to extend the rebound from five-week lows of 90.46 reached a day before.

Aggressive Fed rate hike expectations combined with Chinese covid lockdowns-led growth concerns weighed heavily on the market sentiment these days, throwing the risk barometer, AUD/JPY, under the bus.

Australian Consumer Price Index (CPI) came in at 2.1% QoQ in Q1 vs. 1.7% expected and 1.3% previous. The Trimmed Mean CPI rose to 1.4% vs. 1.2% expected and 1.0% last.

Hotter Australian Inflation fanned expectations of earlier Reserve Bank of Australia (RBA) rate hikes, momentarily boosting the bid tone in the aussie. The US dollar strength, however, continues to dominate, limiting the further upside in AUD/USD, as well as, AUD/JPY.

Meanwhile, the rebound in the USD/JPY pair is helping keep AUD/JPY afloat amid an improved market mood, despite the falling Treasury yields.

Focus now turns towards Thursday’s Bank of Japan (BOJ) monetary policy decision, which will hold the key for yen trades amid the recent sharp devaluation. The market’s perception of risk sentiment will be also pivotal.

AUD/JPY Technical levels

 

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