Listen to the latest market mood for the AUDJPY pair.

Weak AUD, Strong JPY

Markets are firmly back to a risk-off footing on two factors.

  1. Firstly, the Fed was downbeat in its assessment of the US economy. Fed’s Powell discussed forward guidance and reviewed Yield Curve Control but stated its effectiveness was still an ‘open question’. Fed’s Powell was downbeat on US jobs stating that despite May’s upbeat NFP reading it could be years until people find jobs again. Oil plunged more than 4%, antipodean (AUD, NZD) currencies were down, and copper prices fell.
  2. Secondly, the second wave of virus fears hit the markets as Texas reports its highest one day count of new COVID-19 cases and California’s hospitalisations are at their highest.

So, in this risk-off environment expect the high beta AUD to lose value and the safe-haven JPY to attract bids. Therefore expect AUDJPY sellers on pullbacks today.

We expect this outlook to play out over the next 6-10 hours through to New York close and as long as these trade conditions remain.

Main Trade Risks

The main trade risk is if there is some positive news that changes the risk tone. This could be positive COVID-19 news or any very positive Us-China trade news.