AUD/JPY weakens to 75.40 as Aussie trade surplus lags behind consensus and prior

• Australia’s April month trade surplus slipped beneath forecast and previous.
• Risk sentiment will be observed for fresh impulse for now amid lack of data.

The AUD/JPY pair declines to 75.40 after Australia’s lesser than expected trade surplus data release during early Thursday.

While lesser than forecasted 5,100 million trade surplus to 4,871 million grabbed initial attention, a reversal of the previous contraction in the export and import numbers to 3% each from -2% also caught market’s eye later on.

Soft Australian gross domestic product (GDP) figure triggered the quote’s pullback on Wednesday.

Market sentiment remains risk-averse off-late as no result of the US-Mexico talks and pessimism surrounding the US-China trade relations kept threatening the optimists.

Though, upbeat comments from the International Monetary Fund’s (IMF) leader Christine Lagarde, coupled with likely chances of the US-UK and US-Japan trade deal managed to confine risk-off moves.

Looking forward, speech from the Bank of Japan (BOJ) Governor Haruhiko Kuroda at the Institute of International Finance Spring Meeting, in Tokyo, will be closely observed in the absence of any major data.

Also in the spotlight will be political developments surrounding global trade as the US and Mexican authorities are likely to meet today for one last time to decide the fate of higher tariffs on Mexico.

Technical Analysis

With the three-week-old descending channel continues to restrict the pair’s moves between 74.86 and 75.90, magnified momentum is less likely unless witnessing either side break. In doing so, the quote can please traders with either July 2016 low near 74.50 or May 30 high of 76.30 depending upon the side of the break.