AUD/JPY picks up a bid as Australia's jobless rate unexpectedly dips to 6.8%
- AUD/JPY jumps to a session high of 76.78 after Aussie data.
- Australia's jobless rate unexpectedly fell in August while participation rate ticked higher.
- The economy added more than 100K jobs, validating RBA's wait-and-watch approach.
The buying pressure around the AUD/JPY pair has strengthened on strong Australian labor market report.
The data released at 01:30 GMT showed Australia's jobless rate fell to 6.8% in August from July's 7.5%, beating the expected rise to 7.7% by a big margin. More importantly, the unemployment rate ticked lower, even as the participation rate increased to 64.8% from 64.7%.
The economy added 111K jobs in August versus expectations for 50K job losses and 114.7K additions in July. However, the majority of job additions came through part-time work. The number of part-time jobs rose by 74.8K and full-time jobs increased by 36.2K.
Markets, however, are currently focusing on the unexpected decline in the jobless rate. The AUD/JPY pair jumped from 76.47 to 76.78 following the employment report's release and is currently trading near 76.72, representing a 0.10% gain on the day.
Further gains cannot be ruled out as the data validates the Reserve Bank of Australia's wait and watch approach. In other words, the central bank has little reason to cut rates to a new record low of 0.1% from 0.25% in the short-term.
That said, the futures on the S&P 500are currently down 0.17%. If the risk aversion worsens, the Japanese yen may draw bids, pushing AUD/JPY lower. Traders, therefore, need to keep an eye on the broader market sentiment.