AUD/JPY seesaws around one-week low near 75.00 on Australia employment report

AUD/JPY remains heavy despite mixed Aussie jobs report for September.

Australia’s Employment Change slipper lesser than -35K forecast, Unemployment Rate also improved from downbeat expectations.

Downbeat risk tone adds to the pair’s weakness after RBA’s Lowe sounds dovish.

China inflation data, Japan’s Tertiary Industry Index can offer immediate direction, risk catalysts will be the key.

AUD/JPY remains on the back foot near 75.05, down 0.35% intraday, after Australia’s September month employment report during Thursday’s Asian session. Although the key employment indicators came in better than forecasts, the actual readings are still disappointing the AUD bulls.

Read: Aussie Unemployment Rate +6.9 % vs +7.1% expected, AUD under pressure

Earlier in the day, Reserve Bank of Australia’s (RBA) Governor Philip Lowe spoke bearish at the Citi Australia and New Zealand Annual Investment Conference. The central bank chief not only ruled out odds of any rate hikes in the upcoming three years but also cited possibilities of rate cuts towards 0.10%.

Read: Breaking: AUD/USD drops through key trendline support in a 0.57% move on RBA Lowe

It should be noted that AUD/JPY is considered a barometer of the market’s risk-tone and the latest challenges to the trading sentiment have also weighed down the quote. Among them, fears of no US stimulus before the American presidential election and the worsening of coronavirus conditions in Europe have been occupying the front rows.

Recently, US Treasury Secretary Steve Mnuchin dimmed odds of any deal while citing the opposition Democratic Party’s political intentions to block the much-awaited aid package. On the other hand, France and Spain tightened activity restriction rules while the UK is also on the same page. However, the bloc’s resistance to the national lockdown becomes questionable.

Other than what’s already mentioned, uncertainty surrounding Brexit and fears of another economic disappointment from the pandemic, after the activities recovered off-late, also spoil the market’s mood.

That said, S&P 500 Futures struggle for clear direction above 3,480 whereas stocks in Asia-Pacific follow Wall Street’s losses while portraying the sober sentiment.

Having witnessed initial market reaction to the key data/events at home, namely Lowe’s speech and employment figures, AUD/JPY traders will wait for China’s headline inflation numbers for September as well as Japan’s Tertiary Industry Index details for August. However, these catalysts are less likely to supersede the importance of risk catalysts, mainly emanating from the virus headlines and US stimulus updates off-late.

Technical analysis

A clear downside break of a 12-day-old support line, now resistance, directs AUD/JPY sellers towards September 25 high near 74.60 and the previous month’s low around 74.00. On the contrary, an upside clearance of 74.20 support-turned-into-resistance can aim for the 76.00 during further advances.