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AUD/JPY prints mild gains in the Asian session.
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Risk-on tone lifts the sentiment around aussie.
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The yen remains muted as investors pick up riskier assets.
The AUD/JPY is consolidating below the 85.0 mark in the Asian session. The cross trades in a very tight range, where it finds difficult to hold onto the gains.
At the time of writing, AUD/JPY is trading at 84.89, up 0.05% on the day.
The Aussie recovers against its rival after the previous day’s disrupted move when China ended its Strategic Economic Dialogue indefinitely with Australia. However, the market digested the news on the back of strong economic recovery and global growth optimism.
In recent developments, the Reserve Bank of Australia (RBA) remained committed to maintaining a highly accommodative monetary policy until at least 2024. The central bank expected a pick -up in inflation and wage growth, and revised GDP higher to 4.34 in 2021 and 3.05 for the year 2022. Additionally, Australia Service PMI rose to 61.0 in April from 58.7.
It is worth noting that higher commodity prices also aid demand for the antipodean. Furthermore, China posted improved PMI data and trade surplus expanded to USD 42.85 billion in April, far above the market expectations of USD 28.1 billion.
On the other hand, the Japanese yen is struggling on the behest of a broader risk reversal, as investors remain hopeful for speedy global economic recovery, and therefore, prefer high-risk assets for the sake of better investment opportunities.
As for now, the growth risk catalyst and China-Australian spat continue to influence the cross performance, with all eyes on the US NFP release.