Ella 
AUD/JPY rose for a second straight session, hovering around 100.90 during European trading on Tuesday. Positive employment data released last week provided support for the Australian dollar (AUD) as the Reserve Bank of Australia’s (RBA) policy outlook provided optimism.
Employment surged by 64,100 in September, bringing total employment to a record 14.52 million. This far exceeded market expectations for an increase of 25,000 and compared with a revised increase of 42,600 last month.
In addition, the Australian dollar has received support from China’s recent interest rate cuts, given that China remains Australia’s largest trading partner. The People’s Bank of China (PBoC) cut the 1-year loan prime rate (LPR) from 3.35% to 3.10% and the 5-year loan prime rate from 3.85% to 3.60%, as expected. Lower borrowing costs are expected to stimulate domestic economic activity in China, potentially increasing demand for Australian exports.
A weaker Japanese yen (JPY) may exacerbate market concerns, potentially triggering another intervention from Japanese authorities. However, Japan’s Deputy Chief Cabinet Secretary Kazuhiko Aoki declined to comment on currency trends on Tuesday. Meanwhile, Chief Cabinet Secretary Hayashi Lam acknowledged that yen fluctuations have both positive and negative sides.
Takashi Kato, executive director of the Bank of Japan (BoJ), said the central bank was not targeting a specific foreign exchange level but was paying close attention to upside risks from rising import costs. Kato also stressed the need to carefully evaluate the U.S. economy, the upcoming election and Federal Reserve policy.
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