AUD/JPY sees little action on China's mixed inflation data and RBA's SoMP
- AUD/JPY continues to trade largely unchanged on the day above 72.00.
- China's July PPI missed estimates, while the CPI ticked higher.
- RBA's SoMP revised higher the forecasts for jobless rate and reiterated a willingness to ease more if needed.
The AUD/JPY pair has barely moved in response to the mixed batch of Chinese inflation numbers and the dovish tone of the Reserve Bank of Australia's Statement of Monetary Policy (SoMP) released at 01:30 GMT.
China's producer price inflation (PPI) dropped 0.3% year-on-year in July. The gauge was forecasted to drop 0.1% following June's 0.0% reading.
The consumer price inflation (CPI) rose 2.8% year-on-year in July, beating the expected unchanged reading of 2.7%.
RBA's SoMP confirmed that interest rates will remain low for a prolonged period of time and the policymakers stand ready to do more if needed.
The central bank also raised the forecast for unemployment to 5.25% for both December 2019 and December 2020, effectively setting the stage for further rate cuts in the near future.
Even so, the AUD/JPY pair is trading largely unchanged on the day at 72.13 - the level seen before the release of China data and RBA's SoMP.
The lackluster reaction could be due to the fact that the markets are already priced for more rate cuts by the RBA before the year-end.
Further, the slowdown in China's economy, as represented by the drop in the PPI, is generally accepted by now and priced in.
Looking forward, the currency pair could rise toward 73.00, as the daily chart is reporting a bullish reversal candlestick pattern.
Pivot levels