AUD/JPY: No respite for bulls, 80.00 into focus again

AUD/JPY has broken into fresh day lows in the first hour of trading in Tokyo, taking the exchange rate from 81.35 down towards the 80.55 vicinity, as the risk of bolder JPY jawboning by BOJ officials increasing as the Yen continues to appreciate across the board of safe-haven bids.

How long until some Yen jawboning?

While BOJ and government officials have suggested that fighting the Yen appreciation at times of risk aversion is a pointless exercise, they might nonetheless start to step up their rhetoric against excessive Yen appreciation, in an attempt to at least slow down the strong gains. The more expensive the Yen gets, the harder it will be for BOJ Kuroda to stimulate inflation again, as Japanese exports become less competitive, which should weigh on the economy.

AUD/JPY key levels

Should the speed of declines continue, it won't be long for the pair to try and retest 80.00 again - first test was yesterday, where a robust bounce was seen -, followed by 79.50 mid round number ahead of 79.00. On the upside, as long as the risk conditions don't change, and assuming no BOJ intervention takes place, bounce should remain shallow, with mid and round numbers key value levels to re-engage into additional short-side business.