AUD/JPY rises to the fresh 26-month high above 83.00 following upbeat Aussie Wage Price Index

• AUD/JPY rises for the fifth consecutive day after upbeat employment data from Australia.

• Australias Wage Price Index grew better than forecast 0.3% QoQ during fourth-quarter (Q4).

• Risks dwindle as Feds Powell failed to placate bond bears, vaccine optimism also fails to tame the cautious mood.

• US stimulus gridlock continues, Japan is up for removing emergency from seven prefectures earlier than planned.

AUD/JPY rallies to the intraday high of 83.45, up 0.10% on a day, while cheering welcome Wage Price Index for Australia during Wednesdays Asian session. In doing so, the quote marks a five-day uptrend while staying near the highest since December 2018.

Australias Q4 Wage Price Index grew past-0.3% forecast and 0.1% prior to +0.6% QoQ. The key economic data also reprint 1.4% figures for YoY versus downbeat expectations of 1.1%. Further details suggest, Construction Work Done dropped below 1.0% market consensus but recovered from -1.8% upward sly revised prior.

Given the mostly strong data, Australian dollar buyers gained extra support to keep their north-run direction towards the 2018 highs.

However, the latest shift in the market‘s mood seems to challenge the AUD/JPY bulls. Wall Street closed mixed and the US 10-year Treasury yields struggled for further traction to the north after Federal Reserve Chairman Jerome Powell cited fears of coronavirus (COVID-19)-led economic slowdown. However, the Fed’s readiness to extend easy money policies and tame the reflation fears seemed to have probed the risk-off mood.

As a result, S&P 500 Futures recovers early Asian losses while trying to regain the 3,900 threshold, currently around 3,875. Further, the US 10-year Treasury yields drop 1.6 basis points (bps) 1.348% by press time. It should be noted that Japan‘s Nikkei 225 mark near 1.0% losses after the previous day’s holiday whereas Australias ASX 200 also drop 0.40% amid cautious optimism.

Other than Powell, AstraZeneca‘s news of 94% success in reducing hospitalization and Japan’s readiness to take back virus-led restrictions from seven prefectures seemed to have helped the risks off-late.

Looking forward, Powells testimony 2.0 and updates concerning the US covid stimulus will be the key amid a light calendar.

Bulls can keep eyes on the December 2018 peak surrounding 83.90 unless the quote drops back below January tops of 80.92.

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