AUD/JPY establishes above 90.00 ahead of Japan’s National Inflation

• AUD/JPY is sustaining itself above 90.00 despite a flat jobless rate of 3.9%.
• As per the RBA minutes, a rate hike of 40 bps was also into consideration.
• Japan’s National CPI is seen higher at 1.5% against the prior print of 1.2%.

The AUD/JPY pair is sustaining above the psychological resistance of 90.00 after a modest upside move from Thursday’s low at 89.08. The risk barometer is expected to extend its gains after overstepping Friday’s high at 90.29, which will drive the asset towards the round-level resistance at 91.00.

The cross has displayed topsy-turvy moves this week despite the release of the hawkish Reserve Bank of Australia (RBA) minutes on Tuesday. As per the minutes from the RBA policy meeting in May’s first week, a rate hike of 40 basis points (bps) was also into consideration by the policymakers. Mounting inflationary pressures are diminishing the real income of the households, which forced the RBA to unexpectedly shift to a tight monetary policy rather than sticking to a prudent one.

Also, the flat Unemployment Rate at 3.9% and poor Employment Change, released on Thursday, failed to deliver any meaningful impact on the risk barometer. The Australian Bureau of Statistics reported the job additions at 4k, significantly lower than the forecast of 30k.

On the Japanese front, less negative Gross Domestic Product (GDP) numbers have kept the yen bulls on the sidelines. The annual and monthly GDP numbers landed at -1% and -0.2%, lower than the expectations of -1.8% and -0.4% respectively.

In today’s session, the focus will remain on Japan’s National Consumer Price Index (CPI) numbers. The annual CPI figure sees an improvement to 1.5% from the prior print of 1.2% while the core CPI may drop further to -0.9% against the former release of -0.7%.