AUD/JPY cross can neutralise some of the USD dynamics - ANZ

Research Team at ANZ, suggests that the AUD/JPY should stand to benefit in an environment where risk and liquidity dominate.

Key Quotes

“The cross presents the best traditional way to capture the carry trade and at current levels provides a much more attractive entry point to being long the AUD than against the USD.

For the JPY much of the near-term policy risk is now out of the way. Prime Minister Abe has announced his supplementary fiscal program, while the Bank of Japan will be out of the picture until we get closer to the result of its September policy review.

As such, by using this cross one can neutralise some of the USD dynamics (as we await the Fed Minutes) while still remaining positively predisposed to the short-term risk cycle. We do however note that this cross is very tactical and contingent on volatility remaining low.”