■ The bitcoin newsAUD/JPY cross has broken through the psychologically significant 97.00 barrier following mixed Australian employment figures.
■ January's Consumer Inflation Expectations held firm at 4.5%, mirroring December's unemployment rate of 3.9%.
■ Diverging central bank policies create favorable conditions for AUD appreciation against the JPY.
The Australian Dollar continues demonstrating strength against its Japanese counterpart, with AUD/JPY climbing toward 97.10 during Thursday's Asian session. This marks the second consecutive day of gains as traders digest the latest economic indicators from Canberra.
Australia's economic dashboard presented a nuanced picture - while inflation expectations remained anchored at 4.5% and the jobless rate stayed at 3.9%, the labor market surprised with a 65.1K contraction in employment versus forecasts of 17.6K growth. This employment volatility suggests potential headwinds for domestic consumption.
Market participants now anticipate the Reserve Bank of Australia will maintain its current 4.34% cash rate, with only two potential rate reductions priced in for 2024. The central bank's cautious approach contrasts sharply with Japan's monetary environment, where recent soft inflation prints and disappointing wage growth figures reinforce expectations of prolonged accommodative policies.
Technical analysts note the 97.00 level had previously acted as both support and resistance throughout 2023, making its current breach particularly noteworthy. The cross now eyes potential resistance near the 97.50-97.80 zone, last tested during November's rate hike cycle.
Currency strategists highlight the growing yield differential between Australian and Japanese government bonds as a fundamental driver. With 10-year AU yields hovering near 4.15% against Japan's 0.60%, the carry trade appeal continues supporting AUD bids.
Looking ahead, traders will monitor next week's Australian Q4 CPI data and Japan's national inflation figures for fresh directional catalysts. The pair's momentum suggests bulls remain in control, though overbought conditions could prompt consolidation near current levels.