On a sleepy Tuesday session in Asia, there’s one market that’s moving more than others: currencies.
The Australian dollar, seemingly out of nowhere, has jack-knifed higher in recent minutes, jumping to a session high of .7535.
The AUD/USD currently trades at .7524, up 0.76% for the session.
The move may have been sparked by a steep decline in the USD/JPY which has fallen 1.4% to 104.28, undermined by increased doubts that the Bank of Japan will deliver an aggressive increase in monetary stimulus following the conclusion of its July meeting on Friday.
According to the Financial Times, the slump in the USD/JPY followed comments from Taro Aso, Japan’s finance minister, that the government was yet to make a final decision on the size of a recently-announced fiscal stimulus package.
Mr Aso added it was up to the Bank of Japan to decide what steps to take in terms of monetary policy, and that he hoped the BOJ would do its utmost to push inflation to the target rate of 2%.
The move in the yen has led to a sharp weakening in the US dollar index which, along with stop-loss buying, may have contributed to the Aussie’s sharp and sudden move.
Here’s the AUD/USD 5-minute chart.
And here’s the USD/JPY chart over the same time scale.