- AUD / JPY hovers around the intraday low of 70.58.
- The BOJ announced loans to small and medium enterprises at a surprise meeting.
- China’s NPC is lowering its 2020 GDP target, comments intensify discussions with the United States on the Hong Kong issue.
AUD / JPY falls to 70.65, the intraday low of 70.58, after recent catalysts from Japan and China weighed on the pair on Friday morning.
The Bank of Japan (BOJ) left monetary policy unchanged, as expected, during its surprise meeting. However, the Japanese central bank has offered 75 trillion yen in charges to small and medium-sized businesses to fight the coronavirus (COVID-19).
Read: Breaking: BoJ maintains target for short-term interest rate at -0.1%
On the other hand, the updates of the 13th National People’s Congress (NPC) of China weigh on the risk tone and help the Japanese yen to extend the recoveries. In addition to lowering the GDP target for 2020, the Chinese diplomat is ready to tighten his grip on Hong Kong, which, in turn, will intensify the Asian major’s fight with the United States.
Recently, US Senate majority chief McConnell said that China’s continued crackdown on Hong Kong will intensify the Senate’s interest in re-examining the US-China relationship.
It should also be noted that the first Asian news regarding China’s pressure for domestic coal and the sudden departure of the Consul General for Western Australia is putting further downward pressure on the pair. In addition, Fitch lowered Australia’s outlook to a negative level while maintaining the AAA rating for a few hours.
In the midst of all these negative points, there is a ray of hope as the Chinese AFN shows itself ready to implement the trade agreement with the United States.
As a result, stocks in Asia-Pacific remain mostly sluggish, while yields on 10-year US Treasuries also persist below 0.70% at press time.
In the future, the absence of major data will keep qualitative catalysts in the limelight.
Confirmation by the pair of a short-term bearish technical formation on the upside makes it slide towards a level of 200 HMA close to 69.75. Alternatively, an upside break beyond a three-day uptrend line, at 71.15 now, can propel the pair to the March high around 71.50 / 55.