AUD/JPY retreats towards 91.00 on downbeat RBA Minutes, sluggish yields

• AUD/JPY renews intraday low after RBA Minutes, sluggish yields also weigh on prices.
• RBA Minutes disappoints hawks by citing little room for upside risks to inflation.
• US 10-year Treasury bond yields snap two-day uptrend amid US default woes, anxiety ahead of the key US data.
• BoJ’s defense of early money policy, mixed sentiment prod AUD/JPY bulls.

AUD/JPY takes offers to refresh the intraday low near 91.00, reversing the week-start run-up, as the Reserve Bank of Australia’s (RBA) latest monetary policy meeting minutes disappoint the Australia Dollar (AUD) buyers on early Tuesday. Apart from the RBA Minutes, the sluggish US Treasury bond yields also exert downside pressure on the cross-currency pair.

RBA’s May month monetary policy meeting minutes fail to justify the latest hawkish surprise as it cited that easing inflation pressure. The Minutes also showed the policymakers’ concerns about the sluggish productivity growth weighing on the AUD/JPY prices. 

Also read: RBA Minutes: Board considered pausing or hiking 25 basis points in may policy decision

Additionally, the US 10-year Treasury bond yields drop back to 3.49% after a two-day uptrend as market sentiment weakens ahead of the key US debt ceiling talks. Furthermore, anxiety before the key US Retail Sales and China data dump also prods the week-start optimism and lures the risk barometer AUD/JPY pair.

That said, the latest comments from United States House Speaker Kevin McCarthy saying, “I don’t think we’re in a good place,” seem to weigh on the sentiment amid fears of deadlock on the US debt ceiling extension as Republicans may stick to their demand.

Moving on, China’s data dump for April, comprising Industrial Production and Retail Sales for April may entertain the AUD/JPY pair traders. More importantly, headlines surrounding the US debt ceiling talks and the Bank of Japan (BoJ) should be watched carefully for clear directions.

Technical analysis

Despite the latest retreat, AUD/JPY sellers need to conquer the previous resistance line from early May, now immediate support near 91.00, to retake control.