AUDJPY struggles above 94.00 ahead of Australian Employment data

• AUDJPY is sensing initial selling action as sentiment has turned sour amid Russia-Poland tensions.
• The Japanese yen has still to show the impact of a contraction in growth rates.
• This week, the Australian payroll data will be of utmost importance.

The AUDJPY pair is facing headwinds in sustaining above the crucial support of 94.00 in the early Tokyo session. The asset is declining after facing barricades around 94.50 and is expected to remain on the tenterhooks ahead of the Australian employment data, which will release on Thursday.

The cross is been declining on escalating geopolitical tensions. The risk profile has soured after Russian rebels expanded their military activities to NATO-member Poland. In response to that, Russian Federation has denied any attack from their side, however, Poland has called for a meeting with NATO members.

On Tuesday, the risk barometer remained majorly in the bounded territory despite the release of the Reserve Bank of Australia (RBA) minutes. As per the RBA minutes, the chances for a 25 bps rate hike stood at 75% despite a historic surge in the inflation rate to 7.3%.

The board agreed that acting consistently on policy rates would support confidence in the monetary policy framework among financial market participants and the community more broadly. Also, RBA policymakers believed that the Official Cash Rate (OCR) has been elevated materially in a short span of time. Apart from that, interest rate guidance has been escalated to 8%.

Meanwhile, Japanese investors reacted less to the negative Gross Domestic Product (GDP) data released on Tuesday. The Japanese economy has displayed a contraction of 0.3% in the third quarter against expectations of a growth rate of 0.3% and the prior release of 0.9%. On an annualized basis, the economic catalyst has displayed a negative growth rate at 1.2% against an expansion of 1.1% as expected and the prior release of 3.5%.

This week, the critical trigger for the asset will be the Australian payroll data. As per the consensus, the economy has added 15k in October vs. a marginal increment of 0.9k earlier. While the Unemployment Rate is seen higher at 3.6% against the prior release of 3.5%.