AUD/JPY Weakness Blamed on Yen's Strong Intervention

The AUD/JPY currency pair has been experiencing significant weakness, but according to Christopher Lewis, this is more due to the Japanese yen's strength rather than any issues with the Australian dollar. In a recent analysis, Lewis attributes the Aussie's slump against the yen to the ongoing intervention that continues to support the yen. This intervention has led to a market where the yen's strength is overwhelming other factors.

The AUD/JPY pair has been trading between 115 and 110 yen levels, but technical traders note that this is not necessarily a sign of weakness. In fact, Lewis believes that despite the current downtrend, nothing fundamental has changed in the market.

As we move into the Friday session, attention will be on the nonfarm payroll announcement's impact on dollar-yen rates. The US dollar against the yen remains a crucial metric to watch, with some analysts expecting a possible bounce back from the recent decline.

Lewis highlights concerns about potential Bank of Japan intervention and its effects on carry trade setups. However, he emphasizes that the interest rate differential between various currencies and the Japanese yen is substantial, making it an attractive opportunity for traders to buy the Australian dollar.