Repeats with no changes
If Wednesday's flurry of first-tier Chinese economic data reinforce the latest signs of green shoots nB9N219044, and the yen-funded global risk-on flows it catalyzed nL1N21U0NE, AUD/JPY's major breakout could extend up to December's 83.99 peak and signal improving sentiment in other markets.
AUD/JPY, a good proxy for global risk acceptance and Chinese demand, today cleared its post-flash crash highs and 61.8 percent of the December-January risk-off tumble at 79.82-3.
It also retook the 200-DMA at 80.20, leaving just the weekly cloud base and the 76.4 percent Fibo at 81.03/40 as obstacles before December's 83.99 peak.
Hopes that Chinese stimulus efforts are starting to bear fruit and will lift Chinese, German and global economic growth crushed those long yen for safe haven.
A modicum of caution is warranted, though, regarding March China data, as they reflect a post-Lunar New Year rebound that may or may not extend as well as some hope, partly depending on whether the U.S-China trade row ends.
Regardless, negatively yielding long yen trades look unappealing compared to historically high returns in other assets this year against a backdrop of gentler Fed and ECB policies nL1N21M1D1, a lack of BOJ tightening on the horizon and low financial market volatility.
A strong Q1 earnings season opener from JPM today reinforced reflation trade hopes.