AUD/JPY pauses gains near 83.60 post-dismal Aussie data
- AUD/JPY fails to capitalize on the previous session's gains.
- AUD limit gains after disappointing PMI while risk-off mood holds the lower ground.
- Yen gains on its safe haven appeal amid cautious market sentiment.
AUD/JPY consolidates some minor gains on Wednesday morning in the Asian session. The pair constituted a broader trading range of 84.40 and 85.50, before collapsing below 82.20 on Monday.
At the time of writing, AUD/JPY is trading at 83.59, up 0.02% for the day.
The market sentiments were upbeat after US Fed Chair Jerome Powell reaffirmed the US central bank committed to strengthening the labor market conditions while acknowledging the risk of inflation without going for an earlier rate hike.
The Australian IHS Markit Manufacturing PMI edged lower to 58.4 in June, down from the previous month’s reading on the account of slower factory orders and output. The Service PMI also fell to a three month low of 56. Business activity and employment growth momentum slowed down as lockdown in Victoria affected business conditions. The Aussie weighs down by the dismal data.
Rebound in commodity prices helped limit the downside for the pair. The higher commodity prices help commodity-linked AUD to gain against the majors.
It is worth noting that S&P 500 Futures were trading at 4,238, up 0.06% for the day.
On the other hand, the yen remained grounded after the Bank of Japan (BOJ) Minutes of Meeting highlighted the growing economic optimism with rising inflation.
The gains were captured lower following the downbeat data. The Japan Jibun Bank Manufacturing PMI came lower at 47.8 in June from the previous month reading at 48.8.
As for now, traders are waiting for the Reserve Bank of Australia's (RBA) Eliis speech to gauge the market sentiment.
AUD/JPY additional levels