Relentless Sell Off in AUD/JPY Continues

The relentless sell-off in AUD/JPY continues. The pair is down a further 0.88% so far today. Since this time last week, the pair has lost a little over -3.5%, see the chart below. This is the steepest 5 day drop since mid-May. As the chart suggests, outside of the onset of the Covid pandemic, in recent years we don't tend to see weekly falls stretch beyond the magnitude of -4% to -5%. Hence we aren’t too far off these levels.

• In the current context, the pair is close to early July lows around the 91.40/91.50 region (we last tracked 91.65/70 in AUD/JPY). Beyond these levels is the late May highs in the low 91.00 region.
• Weaker equity tones across the region and US futures (-0.50%) are adding to downside momentum in the pair
• The market has largely ignored the mixed Australian housing data from earlier. AUD/USD is down a little from NY closing levels to the low 0.7010/15 region.
• The value of home loans fell -4.4% (versus -3.0% expected), while building approvals only dipped by -0.7%, versus a -5.0% forecast dip.