AUD/JPY slogs upwards, consolidates pre-Tokyo

•  AUD/JPY makes small headway during New York session

•  Japan data disappoints, muted impact

AUD/JPY gained during the New York market session, settling into the Asia session consolidating around the ¥88.20 price level following disappointing unemployment and household spending data from Japan.

Commodities continue to drive the Australian Dollar, even as a strengthening currency threatens to put a damper on the Reserve Bank of Australia (RBA)'s monetary policy, with inflation still on the lower end of the central bank's 2-3% target. With households still laden with high levels of consumer debt, the RBA is unlikely to begin raising rates anytime soon.

Japan unemployment up slightly

Japan's Unemployment Rate data for December showed a small uptick (2.8%, forecast 2.7%), and Household Spending for 2017 also disappointed, showing a 0.1% contraction instead of the anticipated 1.7% growth. The Bank of Japan (BoJ) has anticipated a mild economic slowdown heading into the first half of 2018, and as economic data continues to support that forecast, market expectations of early tapering for the BoJ's asset purchasing program will continue to get pushed out further into the future.

AUD/JPY Levels

AUD/JPY has formed into a rough bullish pennant on H4 and Daily charts, with swing resistance at the ¥89.00 major level, and ascending support from ¥87.30 to ¥87.70