AUD/JPY EXTENDS LOSSES FOR SECOND DAY, IGNORES IMPROVED AUSSIE WAGE GROWTH

• AUD/JPY pays little heed to Australia’s wage growth data.
• The cross bears the brunt of mixed action on the Asian equities. 
• The risk-sensitive pair now awaits RBA’s Ellis speech and Japan’s National CPI data.

AUD/JPY extends its previous day’s negative trade on Wednesday. The currency pair eases below 84.00 during the Asian session. At the time of press, the pair is trading at 83.67, down 0.21%.

The cross-currency seems to ignore moderate growth in Australian wages in Q3, taking the local currency back to its pre-pandemic level. But the numbers are still short of the pace that the policymakers believe would justify any hike in the interest rates. On Tuesday, the Australian Bureau of Statistics (ABS) showed that the country’s price index rose 0.6% in the September quarter, marginally above the predicted number of 0.5%.

Minor seesawing movement in the currency pair is led by Wednesday’s positive Japanese Merchandise Trade Balance Total (October) data. In its latest Merchandise Trade Balance, the export-dependent economy hit a trade surplus of 67.4 billion Yen (around ($586.60 million).

Investors of the safe haven, the yen, are looking forward to the release of Japan’s COVID-19 fiscal stimulus package. The stimulus package, worth 40 trillion yen ($350 billion), is expected to revive the pandemic and oil price-hit economy.

According to analysts at Rabobank, “JPY net short positions edged lower having reached their highest level since December 2018 the previous week.” It further said that “The Bank of Japan’s (BoJ) accommodative policy has been keeping speculative demand for the safe-haven JPY at bay, though the BoJ indicated in late October that it is closely watching JPY weakness and rising commodity prices.”

Amid a relatively shallow economic calendar, the risk-barometer pair will look for impetus from Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis speech and Japan’s National Consumer Price Index scheduled on Friday.