The AUD/JPY currency pair traded in positive territory near 113.00 during the early European session on Monday, as the Japanese Yen weakened against the Australian Dollar following the release of weaker-than-expected Japanese Gross Domestic Product (GDP) data for the second quarter (Q2) of the year [1]. According to the Japanese Cabinet Office, Q2 GDP expanded at an annualized rate of 1.1%, missing both the market consensus of 2.0% and the previous quarter's reading of 1.8% growth. The Q1 figure was 0.5% growth, which also fell short of market expectations of a 0.5% expansion [1].
Capital Economics analysts described the GDP details as a "mixed bag," noting that while GDP expanded at a decent pace in Q2 and government measures limited the pass-through from higher energy prices, a jump in government consumption suggests that expansionary fiscal policies are starting to have an impact [1].
Looking ahead, traders are awaiting the Australian July employment report on Thursday and Japan’s National Consumer Price Index (CPI) inflation data. Economists expect the Australian Unemployment Rate to rise to 4.5% in July from 4.4% in June, with a stronger-than-expected outcome potentially boosting the AUD against the JPY [1]. Deutsche Bank analysts highlighted a busy week for Japan, with their Chief Japan Economist forecasting real GDP growth at +1.6% quarter-on-quarter and core CPI (excluding fresh food) to rise to 1.8% year-on-year from 1.6% in June [1].
From a technical perspective, AUD/JPY maintains a mildly positive momentum, trading above the Bollinger middle band and the 100-day simple moving average. The 14-day Relative Strength Index is around 54, indicating a constructive bullish bias without overbought conditions. Key support levels are at 112.21 and 111.63, while resistance is seen at 113.88 and 114.67, with a potential move toward 115.35 if bullish momentum continues [1].
CONCLUSION
The AUD/JPY pair is benefiting from weaker Japanese GDP data and maintains a bullish technical outlook above key support levels. Market participants are closely watching upcoming Australian employment and Japanese inflation data for further direction. The overall sentiment remains mildly positive for AUD/JPY in the near term.