Daily chart indicators reveal sellers hold the momentum, in the immediate short term.
Australian S&P PMIs were weak in January while the Japanese indexes were positive.
On Wednesday's session, the AUD/JPY finds itself trading near the 97.12 mark, registering a 0.45% decline. The currency pair's daily chart portrays a neutral to bearish outlook, with bears slowly gaining control. Meanwhile, signs of a negative stance are more pronounced as we glance at the four-hour chart. In that sense, the sellers recently gained ground on the back of the Bank of Japan’s hints on a potential pivot and positive economic figures from Japan.
In that sense, the Australian economy, as indicated by the preliminary S&P January PMIs, seems to be on a sluggish note, as the composite PMI has been below 50 for four consecutive months. On the other hand, the Japanese economy appears to be resilient with firm January PMIs across both manufacturing and services, in addition to robust December trade data. Moreover, the JPY seems to be finding demand as the expectations for the BoJ have shifted towards a potential rate increase around mid-year, as on Tuesday’s decision, Governor Ueda hinted that inflation seems to be aligning with the bank’s goal.
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