AUD/JPY hovers above a major level, Australian PMI data is due on Tuesday – Crypto News

• AUD/JPY gains ground with no significant geopolitical developments over the weekend.
• US Secretary of State Antony Blinken called for calm after an Iranian official stated no immediate plan for retaliation.
• The Japanese Yen faces challenges as BoJ Governor Kazuo Ueda advocated to maintain the loose monetary policy.

AUD/JPY snapped its two-day losing streak on Monday as risk-on sentiment returned, with no significant geopolitical developments over the weekend. Antony Blinken, the US Secretary of State, urged for calm after an Iranian official stated that there was no immediate plan for retaliation to the reported Israeli missile strike. Blinken made these remarks while addressing the press on Friday after the G7 meeting of foreign ministers in Capri, Italy, as reported by “The Guardian”.

The Australian Dollar (AUD) edges higher alongside the higher domestic equity market. The ASX 200 Index gained ground for the second consecutive session on Monday, with the increase in metals prices, including Iron Ore, Copper, and Gold. These movements coincide with a reduction in geopolitical tensions in the Middle East, which has uplifted market sentiment.

The Japanese Yen (JPY) encounters obstacles following dovish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda during a seminar hosted by the Peterson Institute for International Economics on Friday, as per Reuters’ report. Ueda stated that the BoJ must sustain loose monetary policy for the foreseeable future as underlying inflation remains “somewhat below” its 2% target, and long-term inflation expectations are still close to 1.5%. He also indicated that the Japanese central bank is “very likely” to raise interest rates if underlying inflation continues to rise and may commence reducing its bond-buying in the future, although the timing remains undecided.

Daily Digest Market Movers: AUD/JPY appreciates on risk-on sentiment

• On Monday, the People’s Bank of China maintained its Loan Prime Rates (LPR) at 3.45%. The LPR functions as a benchmark rate for Chinese banks in setting interest rates for loans extended to their clients. This decision could potentially influence the Australian market, given the close trade relationship between the two countries.
• The Chinese Ministry of Commerce has announced a new tariff on US goods. Specifically, China has imposed a duty of 43.5% on imports of propionic acid from the United States. This chemical is extensively utilized in various sectors, including food, feed, pesticides, and medical applications, as per Reuters report.
• Japan’s National CPI, excluding fresh food but including fuel costs, increased 2.6% year-over-year in February, decelerating from a four-month high of 2.8% in January and falling below forecasts of 2.7%. The slowdown was attributed to mild increases in food prices, although it remained above the Bank of Japan’s 2% target due to the weakness of the Yen and high commodity prices.
• On Thursday, Bank of Japan board member Asahi Noguchi stated that the pace of future rate hikes would probably be much slower than that of its global counterparts in recent policy tightening. This is because the impact of rising domestic wages has yet to be fully transmitted to prices, as reported by Reuters.
• According to a Westpac report, while the RBA signaled that rates are unlikely to be raised further, greater confidence in the inflation outlook is required before contemplating the possibility of rate cuts.
• Traders are expected to closely monitor upcoming Purchasing Managers Index (PMI) and Consumer Price Index (CPI) data from Australia on Tuesday and Wednesday, respectively.

Technical Analysis: AUD/JPY moves above the major level of 99.50

The AUD/JPY traded around 99.70 on Friday. The breakthrough above the significant support level of 99.65, coupled with the 14-day Relative Strength Index (RSI) persisting above the 50 level, indicates an evolving bullish sentiment for the pair. The psychological level of 100.00 appears as the barrier, following the major level of 100.50 and April’s high of 100.81.

On the downside, the AUD/JPY cross could find immediate support at the psychological level of 99.50. A break below this level could lead the pair to approach the psychological level of 99.00. A break below this level could push the pair to navigate the region around the 50-day Exponential Moving Average (EMA) at 98.67 and a major level of 98.50.

AUD/JPY: Daily Chart