AUD/JPY stuck at 10-DMA after downbeat Japanese GDP report

AUD/JPY failed to take out the 10-DMA level of 86.54 even though the seasonally adjusted Japanese Q4 GDP growth rates missed estimates.

The data came-in at 0.3% q/q compared to the estimate of 0.4%. The annualised growth rate stands at 1.2%. Markets were expecting a print of 1.5%.

The bad news does not end here. The current account surplus (JPY 65.5 billion) is the lowest in two years. A sustained drop in the current account surplus means less Japanese demand/purchases of the US treasuries.

Focus on China data

China is set to release its February trade figure today. Strong exports may be positive in the short-run, although, if accompanied by a weak imports number, would only add to concerns that the rebalancing process has derailed. Risk-on action post the data release could lift the AUD/JPY pair and vice versa.

AUD/JPY Technical Levels

The cross was last seen trading around 86.47. A break above 86.54 (10-DMA) would expose 86.91 (previous day’s high) and 87.09 (Jan 27 high). On the other hand, a breakdown of support at 86.16 (Mar 6 low) would open doors for a sell-off to 86.09 (50-DMA) and 85.85 (Feb 28 low).