- AUD/JPY softens to near 97.65 in Thursday’s Asian session.
- Australia’s Unemployment Rate steadies at 4.2% in August, as expected.
- The BoJ is expected to keep interest rates steady later on Friday.
The AUD/JPY cross extends its downside to around 97.65 during the Asian trading hours on Thursday. The Australian Dollar (AUD) weakens against the Japanese Yen (JPY) after the release of the Australian employment report for August. All eyes will be on the Bank of Japan (BoJ) interest rate decision later on Friday. Also, Japan’s National Consumer Price Index (CPI) data will be published.
The Australian Bureau of Statistics (ABS) on Thursday showed that the Unemployment Rate in Australia steadied at 4.2% in August. This figure came in line with the market consensus. Meanwhile, the Employment Change came in at -5.4K in August versus 26.5K in July (revised from 24.5K), worse than the forecast of 22K. The participation rate decreased to 66.8% in August, compared to the previous reading and expectation of 67.0%. The Aussie attracts some sellers in an immediate reaction to the downbeat employment report.
The BoJ is expected to leave the benchmark interest rate unchanged at 0.5% amid domestic challenges and global risks. Investors anticipate the Japanese central bank will hike interest rates by the end of this year. This, in turn, could provide some support to the JPY.
Traders will take more cues from the BoJ Governor Kazuo Ueda’s speech after the policy meeting for hints about the timing of the BoJ’s rate hikes. However, if the BoJ policymaker delivers a surprise dovish remark, this could drag the JPY lower and cap the downside for the cross.
