AUD/JPY extends losses as Australian economy sheds full-time jobs
- AUD/JPY drops 17 pips as Australian full-time jobs dropped in August.
- The headline figure bettered estimates and the jobless rate remained unchanged.
- The drop in full-time jobs may put pressure on the RBA to ease in October.
The already weak AUD/JPY is extending losses, courtesy of dismal labor data released at 01:30 GMT.
The Australian economy added 34.7K jobs in August, beating the estimated figure of 10K by a big margin. However, the job additions were primarily due to a rise in part-time jobs.
The full-time jobs fell by 15.5K in August, having risen by 34.5k in July. Meanwhile, the jobless rate stood unchanged at 5.3%, as expected and the participation rate ticked higher to 66.2% from 66.1%.
The decline in the full-time jobs took the shine off the above-forecast headline figure and is likely hurting the Aussie Dollar.
After all, with full-time jobs falling, the Australian consumer is likely to save more, leading to a deeper drop in consumption and demand-pull inflation in the near future.
The data validates the RBA's dovish stance and may boost the odds of a rate cut in October, keeping the AUD under pressure during the day ahead.
At press time, the AUD/JPY pair is trading at session lows near 73.50 - down 17 pips from the pre-data level of73.67. The pair hit highs above 74.00 earlier today.
As of now, Westpac expects the central bank to cut rates next month, while most other investment banks foresee a rate cut in November and February. The central bank delivered back-to-back rate cuts in June and July.