Suspected Japanese yen intervention drives USD/JPY down 5 yen, lifting AUD/USD above key resistance despite weak Australian inflation data.
AUD/USD surged above 0.7000, gaining 1.06% and clearing its 50-day EMA after USD/JPY plunged more than 5 yen in minutes on suspected Japanese intervention. The move erased earlier losses tied to Australia’s softer-than-expected inflation print, which saw trimmed mean CPI fall to 3.6% YoY from 3.8% forecasted by the RBA.
Australia’s second-quarter inflation data undercut rate hike expectations, with markets pricing out an August increase within hours. Despite stronger-than-expected building permits and expansionary flash PMIs, the Aussie remained subdued until the Tokyo-driven dollar selloff.
Traders reported an estimated 8.1 billion Dollars in suspected intervention, though Japanese authorities have not confirmed the action. The cross-asset reaction lifted risk-sensitive currencies, including the AUD, despite domestic fundamentals.