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AUD/JPY slips near 114.50 as BOJ rate hike expectations firm
Japanese core CPI rose for a third straight month in August, keeping a BOJ move toward a 1.25% policy rate on the table, while China’s Manufacturing PMI improved to 49.8.
AUD/JPY was trading in negative territory around 114.50 in early European trade, as the Japanese yen strengthened versus the Australian dollar.
FXStreet links the move to a rise in Japan’s annual core consumer price index in Tokyo for a third consecutive month in August, which is supporting expectations that the Bank of Japan could raise interest rates as early as September, with many participants looking for a move to 1.25% at the next policy meeting.
The report also points to hawkish guidance from Bank of Japan Deputy Governor Ryozo Himino, and it notes that China data offered some support for the Australian dollar. China’s Manufacturing PMI climbed to 49.8 in August from 49.2 in July, beating the 49.7 consensus, while the Non-Manufacturing PMI held steady at 49.0.
On the technical front, AUD/JPY is described as maintaining a near-term bullish bias as spot remains above the 100-day simple moving average, with the 14-day RSI at 63.27. Support is flagged near 113.66, then the 100-day SMA at 113.25 and the Bollinger middle band at 113.00, while further gains above 114.96 could open the door toward 115.20 and the 116.00 level.