• AUD/JPY remains pressured, renews intraday low after downbeat Aussie data, firmer Japan statistics.
• Australia Retail Sales came in -3.9% MoM in December versus 1.4% previous growth.
• Shift in sentiment, sluggish yields and firmer Japan data also weigh on AUD/JPY.
• Hawkish concerns over BoJ keep bears hopeful, risk catalysts eyed.

AUD/JPY remains pressured as Australia’s downbeat Retail Sales join mostly firmer Japan data and comparatively more hawkish concerns surrounding the Bank of Japan (BoJ) than the Reserve Bank of Australia (RBA). Following the data, the cross-currently pair refreshed intraday low to 91.74 while printing a three-day downtrend during early Tuesday, near 91.85 by the press time.

That said, Australia’s seasonally adjusted Retail Sales for December slumped with a contraction figure of 3.9% versus -0.3% number expected and 1.4% prior.

Earlier in the day, Japan’s Unemployment Rate remains unchanged near 2.5% in December but the Retail Trade rose past 0.5% in market forecasts to 1.1% during the stated month. On the same line, the Industrial Production also crossed -1.2% consensus with -0.1% figure for December.

It should be noted that the Covid-linked news from the US and China joins the market’s reassessment of the pre-data action to underpin the latest cautious optimism. Before a few hours, the news suggesting US President Joe Biden’s administration’s readiness to revoke the Covid-led emergencies from May 11 appeared to have favored the risk profile of late. On Monday, China’s Center for Disease Control and Prevention (CDC) said, reported by Reuters, “China's current wave of COVID-19 infections is nearing an end, and there was no significant rebound in cases during the Lunar New Year holiday.”

Elsewhere, the Japanese government panel’s suggestion to push the 2.0% inflation target to a broader timeframe triggered hopes of the BoJ’s hawkish move and probed AUD/JPY buyers the previous day. On the same line could be the comments from BoJ Governor Haruhiko Kuroda who signaled that the inflation target is achievable.

Against this backdrop, the S&P 500 Futures print mild gains despite downbeat Wall Street performance whereas the US 10-year Treasury yields remain unchanged at around 3.55% after posting a three-day winning streak in the last.

Moving on, China’s official NBS Manufacturing PMI and Non-Manufacturing PMI for January could offer immediate directions to the AUD/JPY pair but concerns surrounding BoJ

Technical analysis

The AUD/JPY pair’s bounce off the 200-day Exponential Moving Average (EMA), around 91.60 by the press time, hints at the cross-currency pair’s rebound.