AUD/JPY holds onto recovery gains above 68.00 after China CPI
- AUD/JPY pays a little heed to China data that matched downbeat forecasts.
- Growing expectations of stimulus from the G7 recently triggered risk reset.
- US President Trump’s press conference, coronavirus headlines will be the key.
With an absence of major disappointment from China’s February month inflation data, AUD/JPY manages to cheer the latest risk reset while taking rounds to 68.10 during early Tuesday.
China’s headlines Consumer Price Index (CPI) YoY matched 5.2% forecast versus 5.4% prior whereas the monthly release proved 0.8% market consensus right.
Read: Chinese Feb CPI: 5.2% as expected (YoY)
Earlier during the day, Australia’s February month Business Confidence and Business Conditions data from the National Australia Bank (NAB) flashed downbeat readings. However, no major reactions to the data were given as traders paddled back the previous day’s risk aversion amid hopes of fresh stimulus from the Group of Seven (G7) nations.
While briefing the press on Coronavirus Task Force, US President Donald Trump signaled major economic steps in response to the deadly virus. Following that, comments from Japan offered additional relief to the markets while turning down the expectations of postponing the Tokyo Olympics as well as signaling the second package of economic steps on Tuesday afternoon.
As portraying the risk recovery, the US 10-year treasury yields bounce off Monday’s record low to 0.685% whereas S&P 500 Futures gain 2.83%, up 78 points, to 2,827 by the time of writing.
Traders will now pay close attention to economic stimulus from Japan and the US for immediate risk recovery. However, worsening situations in Europe and the US might keep weighing the risk-tone unless any news of cures crosses the wires.
Technical Analysis
A sustained break of downward sloping trend line since January 31, 2020, at 68.35, AUD/JPY prices are less likely to avoid visiting the sub-67.00 area.