Australian Dollar inches higher against Japanese Yen following China’s inflation data
AUD/JPY pares its daily losses following the release of key economic data from China, Australia's primary trading partner. However, the currency cross remains in negative territory and is trading around 111.00 during Asian hours on Wednesday.
The Australian Dollar edged higher against the Japanese Yen following China's release of inflation data, despite the currency pair remaining in negative territory. On Wednesday, China's Consumer Price Index (CPI) increased by 0.8% year-over-year (YoY) in August, mirroring market expectations and marking an acceleration from the 0.5% rise in July.
Similarly, the monthly inflation rate for August stood at 0.4%, marking a rebound from the 0.1% decline in the previous month and surpassing the expected 0.3% increase. Furthermore, the Producer Price Index (PPI) rose by 3.8% YoY in August, exceeding the market consensus of 3.7% after climbing 3.5% in July. The AUD/JPY cross depreciated as the Japanese Yen (JPY) strengthened following US Treasury Secretary Scott Bessent's warning to traders against betting against the currency.
The BoJ is expected to raise interest rates the following week, and the Takaichi administration has taken a more hawkish stance, acknowledging the urgent need to curb excessive Yen weakness. Analysts at UOB Group noted that their latest 1-3 week view has turned more bearish after a "unexpectedly sharp move" in USD/JPY. They stated that as of Friday, with spot trading around 155.90, they had highlighted that "conditions are deeply oversold" following last Thursday's sharp drop, and urged that "USD must close below 155.00 before further declines are likely," with the "next level to watch below 155.00" identified at 154.20.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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