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05/06/25
34
AUD/JPY Shows Modest Rebound Amid Range-Bound Trading
The AUD/JPY currency pair is currently experiencing a slight rebound, although it remains anchored within a well-established trading range. The Australian dollar’s performance has shown minimal reaction to recent data on China’s services sector, which reported a modest increase, with the Services PMI rising to 51.1 in May from 50.7 the previous month. The outcome, while in line with expectations, has not significantly bolstered the Australian dollar, often viewed as a proxy for economic activity in China.
During the Asian trading session, the AUD/JPY has attracted some buying interest, effectively halting a previous dip from around the 93.60 mark, a recent weekly high. The pair is currently hovering near the 92.85 to 92.90 range, reflecting a fractional daily gain of 0.20%. Sentiment surrounding potential discussions between leaders from the U.S. and China is providing a supportive backdrop for the Australian dollar, which is contributing to the pair’s slight upward movement.
On the other hand, a modest rise in the U.S. dollar has created a downward pressure on the Japanese yen. However, the expectation that the Bank of Japan will maintain its stance on interest rate increases limits the potential for significant declines in the yen. This sentiment is bolstered by recent data indicating that Japan’s real wages have suffered a decline for the fourth consecutive month amid ongoing inflationary pressures. These economic factors, alongside geopolitical uncertainties, are likely to temper any substantial weakening of the yen.
Furthermore, the dovish stance of the Reserve Bank of Australia continues to cap the Australian dollar’s upside potential. Market participants are advised to remain cautious given the recent pattern of range-bound price movements. A decisive breakthrough above the 93.00 level, along with a daily close above this level, will be essential to support any near-term appreciation of the AUD/JPY amidst lingering trade tensions and market uncertainties.
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