AUD/JPY remained sideways around 91.70 despite better-than-projected Japan’s GDP

• AUD/JPY has continued to remain sideways around 91.70 despite better-than-anticipated Japan’s GDP data.
• The Japanese economy is still in a contraction phase and demands economic stimulus to spurt the growth rate.
• Aussie investors are awaiting China’s inflation data for fresh impetus.

The AUD/JPY pair has continued its sideways auction profile despite Japan’s Cabinet Office having reported better-than-projected Gross Domestic Product (GDP) data for the third quarter of CY2022. The annualized data has contracted by 0.8% vs. the contraction of 1.1% as expected and the prior release of -1.2%. While the quarterly data has contracted by 0.2% against the consensus and the prior release of 0.3% contraction.

No doubt, Japan’s GDP figures are better than projected but the economy is still in a contraction phase and needs economic stimulus to accelerate the extent of economic activities in the economy.

Bank of Japan (BOJ) Governor Haruhiko Kuroda is making significant efforts in pushing wage inflation higher to achieve sustainability of the inflation target at 2%. He dictated that a rise in wage inflation by 3% could support the central bank in achieving the inflation target effectively.

Meanwhile, Aussie investors are awaiting China’s Consumer Price Index (CPI) data, which will release on Friday. As per the consensus, the annual inflation is seen lower at 1.0% vs. the prior release of 2.1%. This may force the People’s Bank of China (PBOC) to favor more policy easing to strengthen economic prospects. More economic stimulus will accelerate economic activities and will also support the Australian Dollar, a leading trading partner of China.

On Wednesday, the Australian Dollar remained highly volatile after the release of the weak GDP data. The annual GDP data has landed at 5.9%, lower than the expectations of 6.3% but higher than the prior release of 3.6%. While quarterly GDP data has been reported lower at 0.6% vs. the projections of 0.7% and the former release of 0.9%.