Anna 
During the European session on Monday, the AUD/JPY pair appreciates to nearly 98.80, potentially buoyed by upbeat Chinese Purchasing Managers Index (PMI) data. The strong trading ties between China and Australia likely contribute to this positive correlation.
The safe-haven Japanese Yen (JPY) may have encountered downward pressure as investor confidence was lifted by the first expansion in Chinese manufacturing activity in six months, observed in March.
China’s Caixin Manufacturing PMI, reported at 51.1 on Monday, exceeded expectations of 51.0 and surpassed the previous reading of 50.9. Additionally, data released by China’s National Bureau of Statistics (NBS) showed that the Manufacturing PMI rose to 50.8 in March from 49.1 in the prior month. Furthermore, the Non-Manufacturing PMI increased to 53.0 in March from 51.4 in February.
Former Bank of Japan (BOJ) official Tsutomu Watanabe has suggested that the next rate hike in Japan may not occur until October at the earliest. Watanabe anticipates a cautious, data-driven approach from the BOJ, citing concerns about Yen depreciation.
However, the Australian Dollar (AUD) may have faced challenges due to weaker Consumer Inflation Expectations, hinting at expectations for interest rate cuts by the Reserve Bank of Australia (RBA) later in 2024. Investors are eagerly awaiting the release of the RBA Meeting Minutes scheduled for Tuesday to gain insights into the central bank’s stance and future policy direction.
