AUD/JPY displays a gap down near 93.50 as China’s anti-Covid locking protests escalate
- AUD/JPY is seeking support around 93.50 after China’s anti-Covid locking protest hit the streets.
- Individuals in China have come out on the roads after frustrating by the prolonged zero-Covid policy.
- Aussie Retail Sales are expected to decline to 0.4% vs. 0.6% reported earlier on a monthly basis.
The AUD/JPY pair has recorded a gap-down opening around 93.50 as Covid-19 concerns in China have escalated the risk-off theme for trading partners of China. The cross has attempted a rebound after a dark open but is still under caution.
Individuals in China have come out on the roads after frustrating by the prolonged zero-Covid policy by the Chinese administration. The Chinese economy is recording fresh highs in the number of Covid-19 cases day after day. The economy recorded a high of 37,971 cases on November 26. Rising risks of civil protests against restrictions on the movement of men, materials, and machines have escalated the risk of further increment in Covid-19 cases.
Intensifying anti-locking protests have raised concerns about growth prospects in the Chinese economy. The country is already facing the risk of bleak demand and a vulnerable real estate sector. This has also impacted the Aussie dollar as Australia is a leading trading partner of China.
Meanwhile, investors are also awaiting the release of the Australian Retail Sales. The monthly economic data is seen lower at 0.4% vs. the prior release of 0.6%. This may add to the downside filters for the Aussie Dollar but will delight the Reserve Bank of Australia (RBA) as the central bank is highly focused to bring inflation down and a decline in retail demand could trim price growth.
On the Japan front, Tokyo’s inflation has outpaced forecasts to hit its fastest clip since 1982, an acceleration that suggests nationwide price growth will also quicken in November after months of yen weakness and elevated energy costs, as reported by Bloomberg. The headline Consumer Price Index (CPI) in Tokyo has escalated to 3.8% vs. the consensus of 3.6%. While core CPI has jumped to 2.5% against the projections of 2.1%.