- AUD/JPY erases partial daily gains in the Asian session.
- Aussie suffers quick losses after China announces indefinite suspension of economic dialogue with Australia.
- Risk aversion underpins the demand for yen.
The Aussie depreciates against its rivals and book some quick losses in the Asian session. The cross peaked at 84.82 before returning to session lows at 84.24, albeit recovering swiftly above 84.50.
At the time of writing, AUD/JPY is trading at 84.53, down 0.08% on the day.
A Chinese top economic planner decided to suspend all China-Australia strategic economic partnership dialogue. The move is a response to some Australian Commonwealth Government official’s actions, in relation to disrupting the normal exchanges and cooperation between China and Australia, as reported by the National Development & Reform Commission (NDRC) of China.
The statement has immediate implications on the cross as it dived lower and remained under pressure. The move could hamper the trade aspects of Australia, as China is the largest trading partner for Australia.
On the other hand, the Japanese yen pulled out some gains on its safe-haven appeal. In recent development, Japan is considering extending the pandemic state of emergency with some relaxation.
As for now, the risk catalyst continues to influence and move the cross in a narrow trading range, as investors avoid the riskier aussie for the time being.
