AUD/JPY bears attack 89.00 on downbeat Aussie employment data, softer yields

• AUD/JPY takes offers to refresh intraday low, extends the previous day’s pullback from one-month high.
• Australia Unemployment Rate increased, Employment Change turned negative in December.
• Treasury bond yields keep the post-BoJ south-run as most Japan companies ready the higher wages.

AUD/JPY renews its intraday low near 88.85 after Australia’s downbeat jobs report for December on early Thursday. In doing so, the cross-currency pair also takes clues from the downbeat Treasury bond yields amid mixed sentiment in the market.

That said, Australia’s headline Employment Change turned negative on a seasonally adjusted basis, printing -14.6K figure versus 22.5K expected and 64K prior. Further, the Unemployment Rate also rose to 3.5% compared to the market consensus of witnessing no change in the 3.4% previous readings.

Also read: Aussie labour report weighs on AUD to fresh sessison lows

Elsewhere, the downbeat US Treasury bond yields also weighed on the AUD/JPY prices. The Bank of Japan’s (BOJ) surprise inaction and receding fears of the Federal Reserve’s (Fed) aggressive monetary policy actions drowned the United States Treasury bond yields on Wednesday. That said, the BOJ left monetary policy and the interest rates unchanged but the US 10-year Treasury bond yields dropped the most in 10 weeks, pressured around the four-month low near 3.37% by the press time.

It should be noted that the mixed concerns surrounding China and fears of more inflation in Japan, due to the latest Reuters Corporate survey suggested the wage increase by major firms, also exert downside pressure on the AUD/JPY prices.

Also read: Reuters Corporate Survey: Most Japan firms heed PM Kishida's call to raise wages this year

Amid these plays, S&P 500 Futures remain directionless while the stocks in Australia and Japan contradict each other as Japan’s Nikkei drops 1.05% but Australia’s ASX 200 rises 0.25% at the latest.

Looking forward, a lack of major data/events may allow the AUD/JPY traders to extend the latest bearish move. However, the Treasury bond yields will be important to watch for clear directions.

Technical analysis

Failure to provide a daily close beyond the 21-DMA, around 89.80 by the press time, directs AUD/JPY towards the monthly support line, at 87.90 by the press time.