AUD/JPY: Mixed Japanese Economic Picture Supports JPY Despite Bearish Bias
The AUD/JPY cross continues to trade in positive territory around 109.95 during the early European session on Thursday.
The Japanese Yen (JPY) has softened against the Australian Dollar (AUD) due to a mixed picture of the Japanese economy, which may reduce the likelihood of a back-to-back rate hike from the Bank of Japan (BoJ) this month.
A recent Tankan survey showed that Japanese manufacturers' confidence hit an eight-year high in Q3, but non-manufacturers' mood soured. The Tankan Large Manufacturing Index rose to 24 in Q3 from 22 in Q2, while the Tankan Non-Manufacturing Index declined to 35 in Q3 compared to 37 in Q2.
Analysts at MUFG note that the Yen is deriving more support from building expectations for faster BoJ rate hikes. Market participants now expect the BoJ to deliver 3-4 more hikes in the year ahead, underscoring how quickly the anticipated tightening cycle has steepened.