The AUD has reasons for strength right now. Firstly, China is moving towards a looser policy stance with the PBoC expected to cut rates again and China’s Gov’t affirming their commitment to keep stock markets stable. Secondly, surging commodities support the AUD. Thirdly, the RBA is at a turning point with their monetary policy stance looking for signs of inflation to be confirmed in the labour market.
The JPY has reasons for weakness over the medium term. Firstly, the BoJ kept up their ultra easy monetary policy stance at the last BoJ meeting. Secondly, they were unfazed by yen weakness. Thirdly, they kept up their commitment to keep the Japanese 10 year bond yield at 0%. Expecting dip buyers on the AUDJPY pair is not unreasonable given current market conditions.
Over the last 15 years AUD/JPY has risen 11 times with an average return of 2.34%. So, do the strong fundamentals and seasonals make the AUD/JPY a good pair to buy in dips right now?
Remember, don’t just trade it, seasonax it!