• AUD/JPY picks up bids to print the first daily gain in three after mixed data from Australia.
• Australia’s employment report for November, Consumer Inflation Expectations for December came in mixed.
• Yields remain downbeat and weigh on AUD/JPY amid sluggish session.

AUD/JPY picks up bids to print mild gains around 93.00 during the aftermath of Australia’s key employment and inflation numbers. In doing so, the Aussie cross portrays the first daily positive in three despite witnessing mixed data.

That said, Australia’s Consumer Inflation Expectations dropped to 5.2% for December versus 5.7% expected and 6.0% prior while a jump in Employment Change and static Unemployment Rate allowed the Australia Dollar (AUD) to stay firmer. It’s worth noting that the improvement in the Aussie Participation Rate also favored the AUD/JPY bulls.

Also read: Aussie jobs data beats expectations, AUD robust

It should be noted that the consolidation of the US Treasury yields around the multi-day low also seemed to have favored the AUD/JPY pair traders. That said, the US 10-year Treasury bond yields probe a two-day downtrend near 3.50% while the two-year counterpart also extends recovery from the monthly low while printing the first daily positive near 4.25% in three.

The recovery in the yields could be linked to the reassessment of the US Federal Reserve (Fed) monetary policy announcements that initially were perceived as dovish despite the 50 bps rate hike and hints for more such moves.

While the data and yields favor the AUD/JPY bulls, an improvement in Japan’s Merchandise Trade Balance to ¥-227.4B in November versus ¥-1,680.3B expected and ¥-2,166.2B failed to impress the pair bears.

Moving on, the AUD/JPY pair traders will pay attention to the risk catalysts and data from China for fresh impulse. That said, China’s Industrial Production and Retail Sales numbers for November, up for publishing at 02:00 GMT, are expected to print 3.6% and -3.6% figures versus 5.0% and -0.5% priors in that order.

Technical analysis

AUD/JPY justifies the latest failure to cross the 21-DMA, the 200-DMA and a downward-sloping resistance line from early September ahead of Australia’s employment report and Consumer Inflation Expectations. Given the quote’s repeated failures to cross the aforementioned key hurdles, the cross-currency pair is likely to decline toward an eight-day-old ascending support line, near 92.40.