Japanese Yen Gains as Sentiment Sours, AUD/NZD Loses Ground After Key Data

Japanese Yen Gains as Sentiment Sours, AUD/NZD Loses Ground After Key Data


Japanese Yen, USD/JPY AUD/USD, AUD/NZD – Talking Points

  • USD/JPY moved lower during Asia trade as sentiment deteriorated
  • New Zealand GDP growth surprised on the upside but NZD unchanged
  • Jobs losses In Australia came in worse than expected as AUD slipped

The Japanese Yen appreciated during Thursday’s Asia-Pacific trading session as market sentiment cautiously deteriorated. S&P 500 futures were trading lower. Earlier in the session, Japanese trade data came in worse than expected at -635.4 billion yen when the market was expecting a small surplus. This also followed commentary from BOJ Governor Haruhiko Kuroda overnight. He made some comments around inflation, noting that without the current temporary factors, inflation would still be slightly positive. This would be welcome to an inflation-starved Japanese economy.

Commodities in Asia were mixed after large moves higher in energy prices in the last 24 hours. Gold moved back below $1,800 as the US Dollar remained firm. Taking a look at the commodity-linked Australian and New Zealand Dollars, AUD/NZD slipped lower. Positive GDP data in New Zealand was offset by weak Australian job figures.

New Zealand GDP revealed growth of 2.8% q/q for the second quarter against the expectation of 1.1%, according to a Bloomberg survey, and the previous print of 1.6%. The New Zealand Dollar jumped initially on the news but has since pulled back to where it was before the data. All eyes will now be on the RBNZ meeting in October as the likelihood for a rate hike increases.

Australian jobs numbers showed that the economy lost 146,300 positions for the month of August, which was worse than the 80,000 contraction expected, according to the Bloomberg survey. This followed a relatively flat July. The job losses were split 68,000 for full-time and 78,200 for part-time. The unemployment rate fell from 4.6% to 4.5%, likely due to the participation rate falling from 66% to 65.5%. The Australian Dollar lost ground immediately and continued to slip throughout the day.

Looking ahead, US retail sales will be a focus alongside some US jobs numbers and Canadian housing starts.

USD/JPY – Technical Analysis

The USD/JPY has been caught in a range since moving up to the high of 111.65 as the 21-day simple moving average (SMA), 2 standard deviation, Bollinger Bands continue to move sideways and have been narrowing. This previous high is now a potential resistance level.

On the downside, the recent previous low of 108.72 may provide support and above that there is potentially trend line support at 108.10. The 200-day SMA has turned to a positive sloping gradient, which may indicate some positive momentum.

Japanese Yen Gains as Sentiment Sours, AUD/NZD Loses Ground After Key Data

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

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