Chart - Courtesy Trading View
AUD/JPY has snapped a 2-day downside and was trading 0.19% higher on the day at 89.34 at around 14:00 GMT.
Japanese markets have witnessed a massive sell-off as investors are awaiting the announcement of the Bank of Japan (BOJ) monetary policy on Wednesday.
Investors are waiting nervously to see if the BOJ will defend its super-sized stimulus policy at a pivotal meeting on Wednesday, which could drive big moves in the yen crosses.
On the other side, higher commodity prices from China's rapid reopening and signs that global inflation has peaked boosted commodity currencies.
China's reopening will help Australia avoid recession through the removal of trade curbs on Australian goods and the return of Chinese students and tourists.
On the data front, China's on Tuesday is expected to report its Q4 GDP figures, which economists polled by Reuters expect to slow to 1.8% from 3.9% in the previous quarter.
Further, optimism soars for policy easing by the People’s Bank of China (PBoC) to support bold steps of reopening and supporting weak housing demand.
The consensus forecast is factoring in the possibility of a 5-15 bps decline in the 5Y LPR at the upcoming fixing on 20 Jan, which will reduce mortgage costs for homebuyers.
Major Support and Resistance Levels:
Support levels - 88.06 (Lower W BB), Resistance levels - 89.69 (20-DMA)
Summary: AUD/JPY trades with a bearish bias. Recovery lacks traction. Scope for re-test of 110-week EMA at 87.23.
