Markets trim RBA rate hike expectations after weaker Australian jobs data while Standard Chartered advances BoJ tightening call to September.
The AUD/JPY pair climbed to 113.55 in early European trading, extending gains as the Australian Dollar found support despite a cooling labor market. Australia’s unemployment rate rose to 4.5% in July from 4.4% in June, while employment fell by 15,800 jobs, missing forecasts of a 15,000 increase.
The softer jobs data has led investors to reduce bets on aggressive RBA rate hikes, with some economists now favoring a hold. Meanwhile, Standard Chartered revised its Bank of Japan forecast, anticipating a 25bps hike in September instead of October, citing fading intervention effects and renewed JPY bearishness.
Institutional investors continue to favor AUD in carry trades against G10 currencies, though traders are rebuilding short positions on the JPY as prior support measures lose impact.