AUD/JPY bulls challenging the 82 handle ahead of Tokyo CPI

• Tokyo Consumer Price Index data is scheduled at 23:30 GMT on Thursday.
• The Reserve Bank of Australia rate statement is slated for next Tuesday at 4:30 GMT.

The AUD/JPY is currently trading at around 81.88 virtually unchanged on Thursday so far as bulls are nearing the 82 handle. 

The Tokyo CPI will be released later in Asia and the news might provide some volatility as the Bank of Japan is closely looking at inflation. 

Meanwhile, the RBA rate statement is scheduled for next Tuesday at 4:30GMT time, however, the bank is expected to keep rates on hold, according to analysts. 

The Japanese Yen has lost steam these last trading days as fears of a trade war between the two superpowers, the US and China, seem to have become an old story for the markets as both parts are negotiating on tariffs. Also lifting the mood in the market is the North Korean leader, Kim Jong-Un, meeting with President Xi Jinping of China talking about denuclearization in the Korean Peninsula. As a result, it looks like investors decided to take some profits on their Japanese Yen positions, seen as a safe-haven.  

Additionally, the positive sentiment around copper prices and risk-on mood “support demand for the commodity-linked / perceived riskier Australian Dollar and remained supportive of the bounce.” says Haresh Menghani, FxStreet’s editor. 

AUD/JPY 4-hour chart

Bulls have found support at the 50-period simple moving average just a few pips below the 82 handle. A breakout would likely lift the cross to 82.50 previous swing high and possibly to the 83 handle home of the 200-period simple moving average. On the other side, support is seen at 81.50 demand level with the 50-period simple moving average acting as dynamic support. Next scaling point to the downside would likely be the 80.80 swing low. Both the RSI and MACD indicators are constructive indicating that a breakout above the 82 handle might be on the cards.