AUD/JPY eases further below 70.00, eight-week top, after China PMI
- AUD/JPY drops after China’s Manufacturing PMI came in softer than expected.
- Risk sentiment dwindles amid mixed messages concerning the virus, US-China trade deal.
- Japan’s PM Abe cited fears of extended national emergency due to the pandemic.
- Second-tier data from Australian, Japan can offer intermediate clues but qualitative signals will be the key.
AUD/JPY extends the pullback moves from multi-day high to 69.75, down 0.25% on a day, after China’s official PMI data weigh on the pair during the early Thursday.
Having spread optimism during the previous reading in March, April month China Manufacturing PMI eased below 51.00 forecast to 50.8 whereas Non-Manufacturing PMI rose from 52.3 prior to 53.2.
In addition to the downbeat China data, the latest challenges to the markets’ risk-on sentiment, due to US President Donald Trump’s comments on the US-China trade deal, also exert downside pressure on the quote.
The pair earlier pair attention to Japan’s Retail Trade and Industrial Production data that came in slightly better than the market consensus.
It should also be noted that the upbeat developments concerning the coronavirus (COVID-19) drug, Gilead’s Remdesivir, previously propelled the risk-on.
While portraying the risk-tone, US 10-year Treasury yields weaken one basis point (bp) to 0.62% whereas US stock futures also trim early-Asian gains.
Although second-tier Aussie and Japan data are on the economic calendar to please the pair traders, updates concerning the virus drug and US-China tussle will be the key to follow.
Technical analysis
Not only 70.00 immediate resistance, but 100-day EMA surrounding 70.35 also questions the AUD/JPY bulls near the eight-week top. Though, sellers are less likely to enter unless breaking April 14 top near 69.26.