Another failed attempt to overwhelm sellers parked below 95.00 fuelled a sharp reversal in AUD/JPY this week, putting it on the verge of breaking the downtrend it’s been bumping up against for months. Recent moves have aligned more with longer-dated interest rate differentials between the US and Japan rather than traditional drivers like risk appetite and yield spreads between Japan and Australia. A bearish break in US Treasury futures on Wednesday may be the catalyst needed to ignite a bullish breakout for AUD/JPY. While hotter-than-expected US inflation data for January drove much of Wednesday’s surge in JPY … (full story)
