AUD/JPY refreshes weekly low near 93.50 on mixed Aussie trade data, risk-off mood

• AUD/JPY takes offers to renew multi-day low, drops for the third consecutive day.
• Headlines surrounding North Korea’s missile attacks, covid weigh on the risk appetite.
• Fed’s move propelled yields and drowned equities earlier.
• Yields, risk catalysts are important for fresh impulse ahead of RBA’s Monetary Policy Statement.

AUD/JPY stands on slippery grounds near the mid-93.00s during Thursday’s Asian session amid mixed Australia trade numbers and risk aversion. In doing so, the cross-currency pair ignores firmer Treasury bond yields during the three-day downtrend to the lowest levels since October 24.

Australia’s trade surplus increased to 12,444M In September versus 8,850M expected and 8,324M prior while the Exports rallied by 7.0%, compared to 2.6% prior. However, the growth of the Imports dropped to 0.4% versus 4.5% prior.

Elsewhere, North Korea’s firing of missiles and Japan’s warning to residents to weigh on the market’s risk profile, which in turn weighs on the risk barometer pair. On the same line could be the coronavirus fears from China as the lockdown surrounding the area involving the world’s largest iPhone factory defied hopes of easing the dragon nation’s zero-covid policy.

It should be noted that the US 10-year Treasury yields rallied to the highest level in a week, firmer around 4.11% by the press time. The reason could be linked to the US Federal Reserve (Fed) Chairman’s speech highlighting the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. It’s worth noting that the Fed’s 75 bps rate hike couldn’t favor the yields earlier on Wednesday.

Against this backdrop, , the S&P 500 Futures print mild losses at the latest while tracking Wall Street’s downbeat performance.

Moving on, a light calendar at home may restrict AUD/JPY moves, as well as the anxiety ahead of the Reserve Bank of Australia’s (RBA) Monetary Policy Statement, up for publishing on Friday.

Technical analysis

A clear downside break of the 21-DMA, around 93.65 by the press time, directs AUD/JPY towards 92.80 horizontal support.