Listen to the latest market mood for the AUDJPY pair.

Strong AUD, Weak JPY

The medium term upside case for the AUDJPY pair still remains in place as price falls back to key support.

The AUD as a pro-cyclical currency benefits from the vaccine hopes which are encouraging for future gains in commodities and equities as we start 2021. Both rising equities and commodities support the Australian dollar.

The Reserve Bank of Australia has stopped cutting interest rates and is set to remain on hold for the foreseeable future. All of this should help support the AUD medium term. As long as the global synchronised recovery is expected then AUDJPY buyers should remain. The JPY should remain weak as long as risk off tones characterise markets more often than not over the coming weeks.

Expect AUDJPY buyers from market.

Trade Risks:

  • Any sharp rise in US 10 year yields can sometimes spook equity markets and send risk markets falling.
  • If the COVID-19 vaccine is shown to be ineffective this will invalidate this outlook.
  • The main risk to this trade is from any risk off trading on global growth weakness.