AUD/JPY inches lower to near 96.60 as safe-haven Yen improves on Middle East tension

Source Fxstreet
  • AUD/JPY snaps its recent gains as the safe-haven Japanese Yen improves on escalated geopolitical tension.
  • White House national security adviser Jake Sullivan warned that US airstrikes were just the beginning.
  • Australian Dollar faces challenges as the S&P/ASX 200 Index retreats from last week's record high ahead of RBA’s interest rate decision.

AUD/JPY retraces its recent gains amid speculation of an imminent shift in the Bank of Japan's (BoJ) policy stance. Additionally, escalated geopolitical tension in the Middle East contributes to increased demand for the safe-haven Japanese Yen (JPY), acting as a headwind for the AUD/JPY cross. As a result, the cross edges lowered to around 96.60 during the Asian session on Monday.

The United States (US) and the United Kingdom (UK) conducted new air strikes on the Iran-backed Houthi militant group in Yemen on Saturday. This action was taken in response to a drone strike that resulted in the death of three US service members in Jordan. Adding to the tensions, White House national security adviser Jake Sullivan warned on Sunday that US airstrikes on Iranian-backed militias were just the beginning. Sullivan also expects the possibility of strikes on Iranian soil.

The Australian Dollar (AUD) is under selling pressure as the benchmark S&P/ASX 200 Index retreats from last week's record high. The decline is particularly pronounced in the miners and energy sectors, which is putting additional downward pressure on the AUD/JPY cross

On Monday, Australia’s Trade Balance (MoM) for January indicated a reduction, with the figure at 10,959M compared to the revised figure of 11,764M in December. Additionally, the Judo Bank Composite Purchasing Managers Index (PMI) improved to 49 in January from 48.1 prior. The Services PMI also saw an improvement, rising to 49.1 from the previous figure of 47.9.

The Reserve Bank of Australia (RBA) is scheduled to announce its interest rate decision on Tuesday. Markets expect RBA to maintain the cash rate at its current level of 4.35%. Investors will pay close attention to RBA Governor Michele Bullock's speech on the monetary policy outlook, as it could provide additional insights into the central bank's stance and considerations for future policy actions.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US August CPI lands tonight: after a 5.4% PPI shock, will the Fed hike on September 16?US August PPI came in at 5.4% year-on-year, above the 5.3% consensus, with core PPI at 4.6%. Traders have pushed the odds of a 25bp Fed hike on September 15-16 to around 70%. Tonight's CPI is the last major inflation print before the decision — here is the full calendar, the consensus numbers, and what a hot versus cool reading would mean for the dollar, yields, gold and stocks.
Author  Irene Q.
Sep 11, Fri
US August PPI came in at 5.4% year-on-year, above the 5.3% consensus, with core PPI at 4.6%. Traders have pushed the odds of a 25bp Fed hike on September 15-16 to around 70%. Tonight's CPI is the last major inflation print before the decision — here is the full calendar, the consensus numbers, and what a hot versus cool reading would mean for the dollar, yields, gold and stocks.
placeholder
Brent tests $108 as a key export pipeline stays shut — can the rally clear $110?Brent crude rose 2.55% to $106.97 and WTI 2.32% to $102.30 as a major regional export pipeline remained offline with no restart timeline. Front-month backwardation has widened to $5.53 from $3.84 a week ago, European gas is at its highest since December 2022, and one analyst sees $119.48 if talks stall.
Author  Irene Q.
Sep 14, Mon
Brent crude rose 2.55% to $106.97 and WTI 2.32% to $102.30 as a major regional export pipeline remained offline with no restart timeline. Front-month backwardation has widened to $5.53 from $3.84 a week ago, European gas is at its highest since December 2022, and one analyst sees $119.48 if talks stall.
placeholder
Fed hike odds near 90% into Wednesday's decision — how to trade the dollar, gold and the S&P 500A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.
Author  Suzie
Sep 14, Mon
A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.
placeholder
Gold falls below $4,300 as higher US yields bolster Fed rate hike betsGold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week. 
Author  FXStreet
Yesterday 01: 23
Gold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week. 
placeholder
【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve beginsThe 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.
Author  Irene Q.
Yesterday 08: 16
The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.
Related Instrument
goTop
quote