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Australian jobs report weakens AUD/JPY but pair holds near 112.75
Australia’s unemployment rate rose to 4.5% in July, pushing traders to scale back expectations for an RBA rate hike.
The AUD/JPY cross attracted some sellers after Australia released a weaker jobs report, but the pair lacked follow-through and remained above its weekly low from the prior day, trading with modest gains around the 112.75 area.
According to data published by the Australian Bureau of Statistics, Australia’s unemployment rate climbed to 4.5% in July from 4.4% in June. The report also showed employed people fell by 15.8K, after a rise of 76.3K in June, and the change came in below estimates for a 15K increase.
Soft inflation readings for Australia’s second quarter added to pressure on the Australian Dollar, helping traders pare back bets for an immediate Reserve Bank of Australia rate hike. That backdrop, alongside a wider interest-rate gap that continues to weigh on the Japanese Yen, has limited the downside for AUD/JPY.
On the yen side, Japanese domestic trade data showed a deficit of ¥634.5 billion in July, which contributed to selling pressure on the JPY. Concerns about Japan’s worsening fiscal condition also remain, helping support the AUD/JPY cross even after the jobs-driven pullback.