Ella 
In Asia on Thursday, the Australian dollar/yen cross came under selling pressure for the third consecutive day, falling to a three-and-a-half-week low. AUD/JPY is currently trading just below the mid-96.00 level and looks set to easily extend this week’s decline from the key 200-day simple moving average (SMA).
Reserve Bank of Australia Governor Bullock made hawkish remarks, saying that the Reserve Bank of Australia remains vigilant about the risk of upward inflation and is not expected to cut interest rates in the short term. As a result, the Australian dollar (AUD) rose slightly. Despite this, Australia’s trade balance data were not ideal, showing that the surplus increased to A$6.009 billion in July, with imports recording -0.8% and exports growing by 7%.
In addition to this, expectations that the Bank of Japan (BoJ) will raise interest rates again in 2024, as well as data on real wage growth in Japan for the second consecutive month in July, continue to support the Japanese yen (JPY) and further limit the AUD/ The yen fork has upside. In addition, Bank of Japan Governor Tsune Takada said that if it can be confirmed that companies will continue to increase capital expenditures, wages and prices, the central bank must further adjust monetary conditions.
Meanwhile, cautious market sentiment is seen as another factor favoring the yen’s safe-haven status relative to the Australian dollar. This, in turn, suggests that the path of least resistance for the AUD/JPY fork is to the downside and suggests that the recent strong rally from around the psychological 90.00 mark, the over-a-year low hit in August, has run out of steam.
