While waiting for PBOC and PMIs data, the AUD/JPY pair temporarily retreats to around 94.20

The early Tokyo session saw the AUD/JPY currency pair hit a momentary pause in the rise around 94.20. Since the start of today's trading session, the risk barometer has shown a strong open-drive action, with the asset climbing significantly. The temporary roadblock is expected to go sooner rather than later as investors anticipate a dovish tone from the People's Bank of China (PBOC).

Australia is China's largest trading partner, which is worth noting. The antipodes will reap the benefits of the PBOC's easy monetary policy as a result. Enhanced Chinese liquidity will benefit Australia's exports and the country's budget.

The Australian bulls held firm last week despite a sharp drop in the country's employment report. The Australian Bureau of Statistics reported a decrease of 40,900 jobs when a gain of 25,000 had been forecasted. However, it was determined that the unemployment rate should be 3.4% rather than 3.5%, thus that number has been adjusted downward.

And yet, yen bulls showed no signs of buying despite an increase in the national consumer price index (CPI). When compared to the expected 2.2% and the prior reading of 2.4%, the actual economic data came in at 2.6%, which is an increase. The Bank of Japan (BOJ) may take a wait-and-see approach if inflation continues to run above 2% for an extended period of time.

In the future, information from IHS Markit's S&P Purchase Managers Index (PMI) will be crucial. Forecasts call for improvements in both the Manufacturing PMI (57.3) and the Services PMI (54.9) in Australia. A rise to 51.8 and 50.7 in the Manufacturing and Services PMIs for Japan is possible.