AUD/JPY struggles to justify upbeat Aussie Retail Sales, firmer yields around 95.00

• AUD/JPY pauses the pullback from intraday high but lacks upside momentum.
• Australia Retail Sales grew 1.3% MoM in July, versus 0.3% expected and 0.2% prior.
• Yields remain firmer amid hawkish central banks, recession woes.
• RBA versus BOJ divergence keeps buyers hopeful even as challenges to risk weigh on prices.

AUD/JPY keeps Friday’s pullback from a multi-day high even after Australia’s Retail Sales improved in July, per the data published during Monday’s Asian session. With this, the cross-currency pair also pauses the retreat from the daily peak while taking rounds to 95.00.

That said, Australia’s seasonally adjusted Retail Sales rose to 1.3% MoM, crossing 0.3% market forecasts and 0.2% prior during July.

It’s worth noting that the cross-currency pair, also known as the risk barometer, remains only mildly bid despite the latest uptick as the market fears economic slowdown amid the major central banks’ aggression towards the rate hikes. In doing so, the quote ignores firmer US Treasury yields, up seven basis points (bps) to 3.106% at the latest.

On the same line could be the weekend comments from the Bank of Japan (BOJ) Governor Haruhiko Kuroda. “Speaking at the Kansas City Fed’s annual conference in Jackson Hole Symposium, Wyoming over the weekend, Bank of Japan (BOJ) Governor Haruhiko Kuroda said that the central bank will likely continue with its accommodative policy in Japan,” reported Reuters.

The underlying reason could be linked to the Japanese yen’s safe-haven appearance, as well as previously dovish comments from the Reserve Bank of Australia (RBA), not to forget the latest US-China tussles. Additionally exerting downside pressure on the AUD/JPY prices could be the Japanese government’s readiness for more stimulus.

That said, AUD/JPY traders should wait for the clear signals from the monetary policy authorities of Australia and Japan, not forget tracking the recently higher recession woes amid fears of rate lifts, to determine short-term moves of the cross-currency pair.

Technical analysis

Triple tops around 95.75-80 tease AUD/JPY bears but the downside bias hinges on a clear break of a three-week-old support line, at 94.45 by the press time.