Ella 
In early European trading on Friday, the Australian dollar/yen broke its three-day losing streak. On the daily chart, AUD/JPY still faces resistance at the 100-day exponential moving average at 95.50. AUD/JPY gains on improving Chinese economic data. AUD/JPY is currently trading around 95.15, up 0.13% on the day.
According to multiple media reports, Chinese leaders agreed at this week’s Central Economic Work Conference to set China’s economic growth target for 2024 at around 5.0%. Additionally, the Chinese government has set the budget deficit at 3% of gross domestic product in 2024, compared with a revised 3.8% ratio this year.
In addition, 650 billion yuan of MLF loans are expected to mature, and the central bank will also release 1.45 trillion yuan to increase bank liquidity. That said, the People’s Bank of China’s measures have supported the country’s financial system and sentiment. The improving economic situation in China has also boosted the Australian dollar, as Australia is one of China’s major trading partners.
In terms of the Japanese yen, reports that the Bank of Japan (BoJ) may exit its negative interest rate policy earlier than market expectations have become a “tailwind” for the Japanese yen (JPY) and may prevent the upside of the AUD/JPY. Japanese Finance Minister Shunichi Suzuki made some verbal intervention on Friday amid currency market volatility. Suzuki said the Japanese authorities will pay close attention to market trends and hope that the exchange rate will stably reflect fundamentals.
Next Monday, traders will focus on Australia’s mid-year economic and fiscal outlook. Focus will turn to Tuesday’s Bank of Japan monetary policy meeting. This event could spark market volatility and point the way towards an AUD/JPY cross.
