Key Moments
- AUD/JPY traded near 110.80 in Asian hours on Thursday, extending its decline for a second straight session.
- Australia’s seasonally adjusted Unemployment Rate rose to 4.6% in August, with full-time jobs falling by 6.3K and part-time roles increasing by 45.8K.
- Japan’s preliminary September PMIs pointed to slower growth, with the Composite index at 52.5 and Services and Manufacturing both easing.
Australian Dollar Under Pressure Against the Yen
AUD/JPY extended its losing streak for a second consecutive day, trading around 110.80 during Asian hours on Thursday. The cross remained under downside pressure as investors reacted to the latest Australian labor market figures, which showed a rise in unemployment and a deterioration in full-time employment.
Australian Labor Market Shows Mixed Picture
Australia’s seasonally adjusted Unemployment Rate climbed to 4.6% in August, up from 4.5% in July and above expectations of 4.5%. Headline employment data came in stronger than anticipated, with total Employment Change increasing by 39.5K, reversing a revised 15.9K decline in July. However, the composition of job gains pointed to underlying softness.
Full-time employment contracted by 6.3K, while part-time employment expanded by 45.8K, signaling that the labor market strength was concentrated in less secure roles. At the same time, the participation rate edged higher to 67.1%, indicating a slightly larger share of the population was either working or actively seeking work.
| Australian Labor Market Indicators | Latest Reading | Previous | Consensus |
|---|---|---|---|
| Unemployment Rate s.a. | 4.6% | 4.5% | 4.5% |
| Employment Change | 39.5K | -15.9K (revised) | – |
| Full-time Employment Change | -6.3K | – | – |
| Part-time Employment Change | 45.8K | – | – |
| Participation Rate | 67.1% | – | – |
US-China Trade Truce Extension and Implications for AUD
On the geopolitical front, US Treasury Secretary Scott Bessent stated that the United States and China agreed to prolong their bilateral trade truce through January 10. This move postponed the original November deadline following an unscheduled meeting in Washington with Chinese Vice Premier He Lifeng.
Given the close trade relationship between China and Australia, shifts in the Chinese economic or policy landscape can influence the Australian Dollar. The extension of the trade truce is therefore a relevant backdrop for AUD performance, including its cross with the Japanese Yen.
Japanese PMIs Point to Slower, But Ongoing Expansion
In Japan, preliminary survey data suggested that private sector momentum eased in September. The S&P Global Composite PMI Business Activity Index slipped to 52.5 from August’s final 53.5, still signaling expansion but at a slower pace.
The moderation was broad-based. The S&P Global Services PMI fell to 51.6, down from August’s five-month high of 52.5. On the manufacturing side, the Japan Manufacturing PMI declined from 54.9 to 54.1, below the market expectation of 55.0. Even so, the reading continued to indicate an expansion in factory activity for the ninth consecutive month.
| Japan Flash PMIs – September | September (Flash) | August (Final) | Market Expectations |
|---|---|---|---|
| S&P Global Composite PMI | 52.5 | 53.5 | – |
| S&P Global Services PMI | 51.6 | 52.5 | – |
| Japan Manufacturing PMI | 54.1 | 54.9 | 55.0 |
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