AUD/JPY fades corrective bounce near 96.50 on mixed Aussie inflation, employment data

• AUD/JPY retreats towards intraday low after downbeat statistics from Australia.
• Australia Employment Change came in below forecast, Unemployment Rate rose in August.
• US 10-year Treasury yields remain sluggish after refreshing three-month high.
• Risk catalysts, BOJ intervention chatters are in focus ahead of Friday’s speech from RBA’s Lowe.

AUD/JPY eases to 96.55, reversing the early Asian session rebound from the weekly low, after mixed data from Australia. Also weighing on the pair could be the market’s cautious sentiment and sluggish yields.

Australia’s Employment Change rose to 33.5K, versus 35K expected and -40.9K prior during August. Further, the Unemployment Rate also rose beyond 3.4% market consensus and the previous readings to 3.5% whereas the Participation Rate matched 66.6% forecasts versus 66.4% prior. Earlier in the day, Australia’s Consumer Inflation Expectations softened to 5.4% for September versus 6.7% expected and 5.9% prior. Given the mostly downbeat data, as well as the Reserve Bank of Australia’s (RBA) hesitance to sound hawkish, the AUD/JPY prices eased following the data.

Also read: Breaking: Aussie employment data misses the mark and is weighing on AUD/USD

On a different page, the People’s Bank of China’s (PBOC) medium-term lending facility (MLF) action should have favored the AUD/JPY buyers but the absence of rate move seemed to have kept the bear’s on the desk.

It’s worth noting that the market’s cautious mood amid chatters of the Bank of Japan’s (BOJ) intervention and sluggish yields, in addition to the hawkish bets on the Fed and the ECB, seems to exert downside pressure on the risk barometer pair. That said, the US 10-year Treasury yields remain directionless near 3.416%.

Elsewhere, US President Joe Biden’s rejection of US fears and China’s stimulus are some of the key developments that should have favored the risk appetite. However, the Sino-American tussles and the energy crisis in Europe seemed to have challenged the optimism. It’s worth noting that the looming labor strike in the US appears an extra burden on the risk appetite.

On Wednesday, Japanese Finance Minister Shunich Suzuki stated that If Tokyo were to intervene, it will do so swiftly, without pause. Also, the country’s Economy Minister Yamagiwa said he doesn't think it is a matter he should answer when asked whether BOJ conducted rate checks in the FX market.

Moving on, talks over the BOJ intervention and the risk catalysts will be important ahead of the RBA Governor Philip Lowe’s speech, up for publishing on Friday.

Technical analysis

The first daily closing below the 10-DMA in a month, around 96.80 by the press time, directs AUD/JPY towards the key support line from early August, at 96.10 as we write.