AUD/JPY continued to edge lower during Thursday’s Asian session, trading near 97.65 as the Australian Dollar (AUD) weakened against the Japanese Yen (JPY) following downbeat employment figures. Attention now shifts to the Bank of Japan’s (BoJ) policy decision on Friday, alongside the release of Japan’s latest Consumer Price Index (CPI) data.
Australian labor market data disappoints
The Australian Bureau of Statistics (ABS) reported on Thursday that the unemployment rate held steady at 4.2% in August, matching expectations. However, employment change showed a contraction of 5.4K jobs, a sharp reversal from July’s revised 26.5K gain and well below forecasts for a 22K increase. Meanwhile, the participation rate slipped to 66.8%, missing both the prior reading and market expectations of 67.0%.
The weaker-than-expected report weighed on the Aussie, with sellers emerging as investors scaled back optimism over the domestic outlook.
BoJ decision in focus
Markets widely expect the BoJ to keep its benchmark interest rate unchanged at 0.5% this week, as policymakers balance domestic challenges with global growth risks. Still, investors anticipate a potential rate hike before the end of the year, which could lend further support to the Yen.
Traders will pay close attention to BoJ Governor Kazuo Ueda’s remarks following the meeting for any clues on the timing of policy adjustments. A hawkish tone could strengthen the JPY further, while an unexpected dovish message might cap downside momentum in AUD/JPY.
