Listen to the latest market mood for the AUDJPY pair.

The risk tone has soured as Hong Kong’s Hang Seng drops 5% as Beijing plans to bring in new security law. Furthermore, China drops it’s 2020 growth target and China’s policy goals fail to deliver an anticipated boost. Risk is heavily tilting off this morning with Asia’s stocks down across the board in a sea of red.

In this environment the AUD as a high beta currency loses value so expect AUD weakness for the session alongside the NZD and CAD.

Conversely, we can expect safe-haven flows into the USD, CHF, and JPY alongside gold that will benefit from the safe-haven flows. Therefore, look to pair strong currencies against weak ones for today’s session. Expect AUDJPY sellers at market and pullbacks today. The Bank of Japan failed to deliver any market surprise to the JPY today, so expect normal JPY safe-haven flows.

We expect this trade to play out over the next 6-8 hours.

The main risks to this outlook:

  • Any positive news on COVID19 will change sentiment.
  • Any positive rhetoric between the US and China could also boost sentiment and invalidate this outlook.