Ella 
AUD/JPY/AUD/JPY attracted some buyers during the Asian session on Tuesday and moved away from the two-week low near 106.55 hit the previous day. Spot prices have climbed above the 107.00 mark in the past hour and now appear to have ended a three-day losing streak as fresh selling emerged near the Japanese yen (JPY).
The prevailing risk-on environment – with global stock markets continuing their runaway rally – is seen as a key factor in undermining the yen’s relative safe-haven status. Otherwise, the yen’s depreciation lacks any clear catalyst and is likely to continue to ease amid speculation that Japanese authorities may intervene in markets to support the currency.
In fact, Japan’s Chief Cabinet Secretary Hayashi Hayashi made some verbal intervention earlier this Tuesday and expressed his readiness to take all available measures on foreign exchange. There has been speculation that the Bank of Japan (BoJ) may raise interest rates due to the weakening of the local currency, which should be a “positive side” for the Japanese yen, so AUD/JPY bulls need to be cautious.
In addition, concerns about the economic slowdown in China, the world’s second largest economy, also appear to be dragging down the Australian dollar (AUD) represented by China, and may restrain the trend of AUD/JPY. China’s economy expanded at an annual rate of 4.7% in the second quarter of 2024, official data showed on Monday, compared with 5.3% in the previous quarter.
Therefore, it would be prudent to wait for strong follow-through buying before confirming that the recent corrective decline from the highest levels since May 1991 (around 109.35 hit last Thursday) is over and positioning for further appreciation. Act of. Traders are now looking to Australia’s monthly employment data due on Thursday to provide some meaningful impetus.
