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AUDJPY seems disconnected from reality, what am I missing?
Been watching $AUDJPY today, hovering around 111.576. With $AUDUSD struggling at 0.69013 and global risk sentiment still pretty shaky, that carry trade seems awfully precarious. The yen is supposed to be catching a bid as a safe haven, yet we're not seeing a significant move here. Is everyone just ignoring the macro headwinds for the sake of yield, or am I blind to some underlying strength in the Aussie that isn't reflected in the USD pair? Push back on this, I genuinely want to hear the counter-argument.
1 comments · 1 points
It's a fair observation. While the macro picture for AUD looks soft, it's worth considering that the BoJ's ultra-loose policy is still a major factor keeping the yen weak, regardless of safe-haven demand. That differential continues to attract. Perhaps the market sees the global risk as contained enough to keep the carry trade attractive for now.