AUD/JPY advances towards 98.00 ahead of Australia’s employment data

• AUD/JPY is marching towards 98.00 on higher consensus for Australian employment data.
• Australian Employment Change is seen extremely higher at 50k against job layouts of 40.9k.
• RBA’s fourth rate hike by 50 bps poured fresh blood into the aussie bulls.

The AUD/JPY pair has displayed a powerful rebound after a gap down opening around 97.00 on Monday. The asset is advancing firmly towards the immediate hurdle of 98.00 amid an overall bullish bias towards the risk barometer. Broadly, a break above 94.80-96.10 has already strengthened the aussie bulls.

The antipodean witnessed buying interest from the market participants after the announcement of an interest rate hike by the Reserve Bank of Australia (RBA).  RBA Governor Philip Lowe went hawkish and announced a hike by 50 basis points (bps) consecutively for the fourth time to address its foremost priority of scaling down price pressures. Currently, RBA’s Official Cash Rate (OCR) stands at 2.35%.  

The central bank has set a target for interest rate elevation and has forecasted the area where inflationary pressures will find their peak. The RBA is looking to escalate its OCR further to 3.85%. Also, the inflation rate will top around 7%. It is worth noting that the inflation rate for the second quarter of CY2022 has been recorded at 6.1%.

Going forward, the Australian employment data will hog the limelight. As per the consensus, the Unemployment Rate is expected to remain stable at 3.4%. The show stopper data will be Employment Change, which is seen extremely higher at 50k against job cuts of 40.9k.  

On the Tokyo front, the upbeat Gross Domestic Product (GDP) data failed to bring meaningful strength to the yen bulls. The Japanese GDP data landed at 0.9%, higher than the forecasts of 0.7% and the prior release of 0.5%. Also, the annual data improved meaningfully to 3.5% against the expectations and the prior print of 2.9% and 2.2% respectively.