AUD/JPY sees a cushion around 90.00 on a positive market mood
- AUD/JPY is going through a minor correction but sees support around 90.00.
- The RBA is expected to feature more rate hikes ahead.
- Japan’s Unemployment Rate could deteriorate to 2.7%.
The AUD/JPY pair is witnessing a gradual decline after sensing resistance at around 90.40. A modest fall and a decent upside rally indicate a minor correction, which may find buyers near the psychological resistance of 90.00. A soaring market mood considering a firmer rebound in Wall Street is expected to underpin the risk-sensitive currencies in the Asian session.
The Reserve Bank of Australia (RBA) has just started its rate hike cycle to tackle the soaring inflation by elevating its Official Cash Rate (OCR) by 25 basis points (bps). Officially, their interest rates are at 35 bps and RBA policymakers have started betting on more rate hikes in the remaining year.
On Wednesday, RBA Assistant Governor (Economic) Luci Ellis bolstered the expectations of more rate hike announcements by the RBA in its upcoming monetary policy. His speech was roaming around the housing market, which is imbalanced on the demand-supply mechanism and is needed to be balanced through policy tightening.
On the Japanese yen front, a continuation of an ultra-loose monetary policy will keep the yen bulls on the edge. The Bank of Japan (BOJ) has failed to resort to pre-pandemic growth levels despite the uninterrupted quantitative easing. Therefore, a continuation of the deployment of stimulus packages is highly required. Going forward, investors’ focus will remain on employment data from the Statistics Bureau of Japan. The Unemployment Rate is expected to deteriorate to 2.7% against the prior print of 2.6%.