AUD/JPY bears ignore strong Aussie trade data to attack 93.00 amid risk-off mood

• AUD/JPY takes offers to renew intraday low despite upbeat Australia trade numbers.
• Aussie trade surplus widened whereas Exports, Imports improved in April.
• BOJ’s Adachi hints at more days for easy money policy as inflation target remains unachieved.
• Markets sentiment worsens as growth fears join hawkish Fedspeak and Chinal-linked jitters.

AUD/JPY renews intraday low to 93.03 as it snaps a four-day uptrend during Thursday’s Asian session. In doing so, the cross-currency pair reverses from a one-month high despite upbeat trade data from Australia and comments favoring JPY weakness from a Bank of Japan (BOJ) official. The reason could be linked to the risk-aversion wave in the markets of late.

Australia’s Trade Balance rose to 10,495M versus 9,300M market forecasts and 9,314M prior. Further details suggest that the Exports grew to 1% versus 0% previous readings while the Imports eased contraction from -5.0% to -1.0%.

On the other hand, Bank of Japan (BOJ) board member Seiji Adachi said in a statement on Thursday, “Japan is still halfway to achieving BOJ's price target.” The same suggests a long way before the Japanese central bank hints at monetary policy tightening.

Talking about the risk appetite, fears of growth and faster Fed rate hikes, especially after the recent strong US data and hawkish Fedspeak. Also weighing on the sentiment could be headlines from China and anxiety ahead of this week’s top-tier events, namely the US ADP Employment Change and Nonfarm Payrolls (NFP) for May.

The Fed’s monthly Beige Book joined hawkish comments from St. Louis Federal Reserve Bank President James Bullard and Richmond Fed President Thomas Barkin to resurface growth fears. Also signaling recession woes were fresh headlines suggesting trade/political tensions between the US and China, as well as between China and Australia, not to forget fears emanating from the Russia-Ukraine crisis.

That said, Reuters came out with the news suggesting the US readiness to implement a ban on Xinjiang goods whereas comments from China's Ambassador to Australia, Xiao Qian, hint at no relief to Aussie business houses from Beijing’s ban despite the change in government.

While portraying the mood, S&P 500 Futures struggle to defend the 4,100 level whereas the US 10-year Treasury yields retreat from a two-week high, down 1.4 basis points (bps) to 2.91% of late.

Moving on, AUD/JPY moves are likely to take clues from the market sentiment, which in turn signal further weakness for the pair.

Technical analysis

AUD/JPY pullback remains elusive until the quote stays beyond 61.8% Fibonacci retracement (Fibo.) of April-May downside, around 92.55.