AUD/JPY steadies around seven-week top below 82.00 on mixed concerns
- AUD/JPY pauses four-day uptrend amid a sluggish start to the week.
- Optimism over easing of virus-led lockdowns battles mixed concerns over covid cases, central bank actions and politics.
- A light calendar at home and off in the US questions market sentiment.
AUD/JPY struggles to extend the four-day uptrend, down 0.09% intraday around 81.77 during the early Asian session on Monday. The risk barometer pair portrays mixed feelings in the market amid hopes of easing the covid-led activity restrictions in Australia and worsening virus conditions in Japan, not to forget uncertainty over monetary policy and politics.
With an easing in virus numbers during the weekend, from the record high of 1,760 to sub-1,700, Victorian Premier Daniel Andrews hints at regional merits to lockdown. Even so, fears that the Delta covid variant is pushing the Aussie medical services to the brink, as ABC news hints, keeps the AUD/JPY traders cautious.
It’s worth noting that the Reserve Bank of Australia (RBA) is up for meeting this week and is more likely to convey challenges for dialing back the easy money policy amid the COVID-19 spread in the Oz economy.
On the other hand, a covid condition in Japan worsens as Tokyo Paralympics ends. “Local governments in Japan are scurrying to set up temporary treatment sites for COVID-19 patients as the recent surge in infections has caused a serious shortage of hospital beds across the country, with 25 governments having already opened or are planning to open such facilities,” said Kyodo News.
The worsening of the virus conditions and holding of international games has led to a political backlash in Japan as Prime Minister Yoshihide Suga has already signaled to resign after widespread criticism. It’s worth noting that the Bank of Japan (BOJ) is yet to open up any new measures and may not step back considering the pandemic and doves it holds.
The downbeat US jobs report and China’s airplanes’ presence in Taiwan also challenge the market sentiment and the AUD/JPY prices. That said, the S&P 500 Futures remain pressured around 4,533 by the press time, portraying the sluggish mood.
Moving on, Australia’s ANZ Job Advertisements for August, prior -0.5%, will decorate the calendar but risk catalysts are likely to keep the driver’s seat. Above all, an off in the US and Canada could offer a softer start to the week.
Technical analysis
A pullback from 200-DMA, around 82.10, keeps AUD/JPY sellers hopeful but a clear downside break of a two-week-old rising support line near 81.50 becomes necessary.