Listen to the latest market mood for the AUDJPY pair.

Strong AUD, Weak JPY

The RBA is expected to keep interest rates at 0.10% now for the foreseeable future. This means the RBA’s easing cycle is done for now. Also, with the positive vaccine news pro-cyclical currencies like the AUD should benefit as commodities move higher. Iron Ore demand on global growth prospects will boost the AUD and rising equities will also support the AUD medium term. Finally, China’s recovery helps the AUD as around 30% of all Australia’s GDP comes from its trade with China.

The JPY should remain weak going forward as positive risk sentiment of Pfizer’s vaccine news boosts market sentiment. The risk on tones weaken the JPY.

Therefore, expect AUDJPY buyers on pullback.

Trade Risks: The main risk to this trade is if the COVID-19 vaccine proves ineffective and the medium term global growth outlook changes.