AUD/JPY bears disregard solid Australian trade statistics to target 93.00 amid a risk-off sentiment

The market attitude deteriorates as GDP concerns combine aggressive Fed language and China-related anxieties.

During Thursday's Asian session, AUD/JPY retests its intraday low at 93.03, reversing a four-day upswing. In doing so, the cross-currency pair retreats from a one-month high despite positive Australian trade data and remarks favoring JPY weakening from a Bank of Japan (BOJ) official. The rationale may be related to the recent market risk aversion wave.

The Trade Balance of Australia increased to 10,495M vs 9,300M market projections and 9,314M before. Additional information suggests that Exports increased to 1 percent from 0 percent previously, while Imports slowed from -5 percent to -1 percent.

In contrast, Bank of Japan (BOJ) board member Seiji Adachi stated in a Thursday statement, "Japan is still halfway to the BOJ's price objective." The same signals that it will be some time before the Japanese central bank hints to a tightening of monetary policy.

Discussing risk appetite, growth anxieties, and quicker Fed rate hikes, especially in light of recent robust US data and aggressive Fedspeak. In addition, news from China and nervousness ahead of this week's major events, including the US ADP Employment Change and Nonfarm Payrolls (NFP) for May, might impact on mood.

The monthly Beige Book and the hawkish remarks of St. Louis Federal Reserve Bank President James Bullard and Richmond Federal Reserve Bank President Thomas Barkin helped revive growth anxieties. New stories indicating trade/political tensions between the United States and China, as well as between China and Australia, not to mention anxieties stemming from the Russia-Ukraine situation, also signaled the onset of a recession.

However, Reuters reported that the United States is prepared to apply a ban on Xinjiang products, while China's ambassador to Australia, Xiao Qian, said that Australian businesses will continue to be subject to Beijing's restrictions despite the change in administration.

S&P 500 Futures struggle to maintain the 4,100 mark, as 10-year US Treasury rates drop from a two-week high, falling 1.4 basis points (bps) to 2.91 percent recently.

Moving forward, AUD/JPY price movements will likely be guided by market sentiment, which indicates additional pair decline.

Technical Evaluation

AUD/JPY retreat is illusive while the price remains above the 61.8 percent Fibonacci retracement (Fibo.) of the April-May decline, which is located at 92.55.