The AUD/JPY pair slipped below 94.00 after facing barricades around 94.40 in the Asian session. The risk barometer remained in the grip of bears on Friday after giving a downside break of 94.86-95.60 range as the Japanese agency released higher core Consumer Price Index (CPI) data. The asset has carry-forwarded the bearish sentiment recorded on Friday, and more downside looks likely as the asset has swiftly violated the cushion of 94.00.
The Statistics Bureau of Japan reported the National CPI trimmed to 2.4% vs. 2.5% reported earlier. While the core CPI climbed to 1% from the prior release of 0.8%. The BOJ remained worried as oil and food prices kept the inflation rate above 2% earlier. Now, a recovery in demand for durable goods is going to delight the BOJ policymakers as core CPI has escalated.
To keep the core CPI elevated above the desired levels, the BOJ needs to focus on improving wage rates in the labor market. Higher paychecks are significant to pay for products and services and to keep consumption and saving patterns stable.
On the Aussie front, investors are keeping an eye on inflation data, which is due this week. The data will support the Reserve Bank of Australia (RBA) to decide on the extent of the interest rate hike to be announced in the first week of August. As per the market consensus, the overall CPI for the second quarter of CY2022 is 6.3%, much higher than the prior release of 5.1%. This will force the RBA to step up Its Official Cash Rate (OCR) further.
AUD/JPY LONG (Buy) Enter at: 95.285 T.P_1: 96.061 T.P_2: 100 S.L: 91.640
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