- AUD/JPY is likely to find a cushion around 90.50 amid rising volatility in the Japanese Yen.
- A spike in Covid infections in China might worsen supply chain bottlenecks further.
- The BOJ has cleared that the central bank is not ditching the ultra-loose policy.
The AUD/JPY pair is sensing a halt in the corrective move to near 90.50 in the early Asian session. Earlier, the risk barometer slipped gradually after failing to extend its upside journey above the crucial resistance of 91.00. The cross is expected to deliver a recovery move as the expression of the continuation of the accommodative stance by the Bank of Japan (BOJ) has triggered volatility for the Japanese yen.
Meanwhile, the AUD/USD is showing signs of loss in the downside momentum and a similar kind of expectation is from the AUD/JPY pair.
The Australian Dollar is likely to display complicated moves as various countries are levying Covid safety measures for travelers from China. Covid infections have spiked dramatically in China after the rollback of lockdown restrictions and the reopening of the economy at a sheer pace. Health officials in the United States cited that the economy will impose mandatory COVID-19 tests on travelers from China.
The Chinese economy has already dismantled quarantine rules for inbound travelers. The staff of hospitals is describing the current time as the busiest period of their lifetime citing a sharp rise in Covid-19 cases. The rationale behind the reopening of the economy was to ease supply chain disruptions, however, it seems that the sheer pace of the economy’s reopening has worsened supply chain bottlenecks.
On the Tokyo front, the BOJ cleared that widening of the yield band was meant to address distortion in the 10-year Japanese Government Bonds (JGBs) pricing and this is not a step toward an exit from ultra-accommodative policy, as reported by Reuters. This might result in further weakness in the Japanese yen ahead.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.