The AUD/JPY cross navigated uncertain waters on Monday, oscillating between modest gains and losses during the Asian session. Trading around the key 107.00 level, the pair showed limited reaction to underwhelming Chinese economic indicators.
China reported a 4.7% year-on-year GDP growth for Q2 2024, down from 5.3% in the previous quarter, with quarterly growth slowing to 0.7% from 1.5%. Retail sales and industrial production figures also fell short of expectations, suggesting a subdued economic recovery trajectory.
For the Australian Dollar (AUD), these figures failed to provide significant momentum. However, anticipation of potential interest rate hikes by the Reserve Bank of Australia (RBA) offered some support to the currency.
Conversely, the Japanese Yen (JPY) found support amid speculation that the Bank of Japan (BoJ) could raise rates amidst a weaker domestic currency. Additionally, safe-haven demand for JPY increased amidst geopolitical concerns following an alleged assassination attempt on former US President Donald Trump.
These factors contributed to a cautious approach among traders, keeping the AUD/JPY cross range-bound. Market participants await clearer signals before committing to directional trades, especially after the pair pulled back from recent highs near 109.35, observed last Thursday.
As the week progresses, market dynamics including economic data releases and geopolitical developments are expected to provide clearer direction for the AUD/JPY pair.
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