The AUD/JPY pair relinquished its recent gains, hovering around the 103.00 mark during Asian trading hours on Thursday. This reversal in the AUD/JPY cross trajectory is attributed to the release of divergent employment figures from Australia earlier in the day.
According to data from the Australian Bureau of Statistics, the seasonally adjusted Employment Change for April exceeded expectations, registering a notable increase of 38.5K, bringing the total number of employed individuals in Australia to 14.3 million. However, the Unemployment Rate climbed to 4.1%, marking its highest level since January, with the number of unemployed individuals rising by 30.3K to 604.2K.
Meanwhile, Australia’s 10-year government bond yield experienced a downturn, settling around 4.2%, subsequent to the release of the Wage Price Index (QoQ), which recorded a modest 0.8% uptick in the first quarter, slightly below market projections of 0.9%. These data points have fueled a dovish sentiment surrounding the Reserve Bank of Australia (RBA), potentially influencing monetary policy decisions.
On the Japanese front, weaker-than-anticipated Gross Domestic Product (GDP) figures for the first quarter tempered the advance of the Japanese Yen (JPY) and curbed the decline of the AUD/JPY cross.
Preliminary data revealed that Japan’s GDP contracted by 0.5% QoQ in Q1, surpassing market forecasts of a 0.4% downturn. The Annualized GDP also fell by 2.0%, exceeding the anticipated decline of 1.5%. Japan’s Economy Minister, Minister Shindo, acknowledged the economy’s potential for a moderate recovery but emphasized the need for vigilance against risks associated with foreign exchange fluctuations, which could exert upward pressure on domestic prices.
