Listen to the latest market mood for the AUDJPY pair.

Asian equity markets traded mainly up overnight as the risk tones have been more optimistic this week. This resulted in some AUD strength which has been further supported by moves from the RBA who were open to reducing their QE programme should the economy recover.

The medium term picture however remains. With many companies around the world having shut or drastically reduced their output future earnings will be damaged. Therefore, we anticipate the risk tone returning to ‘off’ in the coming days.

As long as equity markets remain pressured medium term expect the JPY strength to return. Also, medium term, expect the AUD to remain sold on risk off tones which drag down the commodity based currencies like the NZD, AUD and the CAD.

  • Therefore expect sellers on AUDJPY on any moves back towards 69.50 with near term stops at 72.00.
  • We expect this outlook to play out over the next 2-3 weeks.
  • The main risk to this set up remains to be any positive coronavirus news which would send the market back into a risk ‘on’ mood and weaken JPY and strengthen AUD.