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AUD/JPY holds above 113.50 as RBA minutes loom
Australia’s unemployment rate rose to 4.5% in July, while employment fell, which has tempered expectations for more aggressive RBA hikes.
The AUD/JPY pair was trading in positive territory near 113.55 during the early European session on Friday, supported by bullish momentum that remains in place above the 100-day simple moving average and the Bollinger Bands’ middle line, according to FXStreet.
FXStreet said the labor market data contributed to a shift in rate expectations, with Australia’s unemployment rate ticking up to 4.5% in July from 4.4% in June, and employment falling by 15,800 jobs versus a prior gain of 80,200 and market expectations for a 15,000 increase.
The weaker jobs report has led markets to scale back expectations for further aggressive interest rate hikes by the Reserve Bank of Australia, FXStreet noted, while Ray White chief economist Nerida Conisbee said the rise in unemployment strengthens the case for the RBA to hold, given broader signs of economic weakness.
On the Japan side, FXStreet cited signs that some traders are rebuilding bearish bets on the JPY after the impact of intervention faded, and Standard Chartered brought forward its outlook for the Bank of Japan’s next move, projecting a 25 basis point hike on 18 September. The next upside levels flagged were 114.40, then the upper Bollinger Band near 114.75, with resistance at the 115.00 psychological level and support near 113.10.