JPY: Asia Wrap- USD/JPY Drifts Off 150.00, Dips To Be Supported After Breaks 149

RBA Governor Bullock noted that the vacancies/unemployment ratio was well off its highs and thus signalling that the labour market has eased. The quarterly ratio has been moving sideways for a year and remains above the historical average. However, monthly internet vacancies/unemployed appeared to stabilise in the 3 months to July around the series average. The SEEK new job ads index has moved sideways through most of 2025. 

Australia SEEK new job ads index 2013=100

• SEEK reported that July vacancies rose a seasonally adjusted 0.8% m/m but are still down 4.8% y/y. However, the 3-month annualised rate turned positive for the first time since July 2022, consistent with some stabilisation. SEEK notes that the trend posted two consecutive monthly increases for the first time since mid-2022.
• There was strong job ad growth in SA and WA and in the medical and hospitality sectors. SEEK observes that skill shortages persist in mining and renewable energy.
• June applicants-per-ad also appears to have peaked after trending higher since the May 2020 trough. In June the measure fell 4% m/m but is still up 9% y/y with 3-month momentum robust. Labour supply remains elevated.
• The stabilisation in vacancies is consistent with the S&P Global PMI which noted in the preliminary August composite report that there was increased hiring to fill a pickup in new orders. August employment is released on September 18.

Aussie bond futures hold weaker, but away from session lows. Weakness has been concentrated in the front end. The 3yr (YM) future was last 96.565, off 3bps, up slightly from session lows of 96.535. The 10yr future (XM) is off less than 1bp at this stage. 

• The main data focus was the July CPI print, which came in well above market expectations (headline at 2.8%y/y versus 2.3% forecast and trimmed mean to 2.7%y/y from 2.1% in June).
• The monthly data are incomplete, for instance services aren’t updated in the first month of the quarter, and headline continues to be impacted in both directions by government electricity rebates. As a result, the RBA continues to focus on the quarterly data with Q3 not released until October 29.
• This may have tempered market reaction to a degree.
• In the cash ACGB space, yields are higher across the curve, with the front end leading. We sit away from yield highs though. The 3yr last near 3.42% (highs were close to 3.44%), up 2.5bps, while the 10yr is up close to 1bp, last near 4.32%.
• There has been a slight firmed in RBA dated OIS, around 2bps for contracts out to April next year. Still a full cut is still priced for the Nov 2025 meeting. Only 20% probability of a cut is given for the Sep meeting.  
• Tomorrow, we get further inputs into Q2 GDP, with Private capex out. Earlier, Q2 real value of construction work done rose 3% q/q & 4.8% y/y, highest since Q4 2023 and , stronger than expected, after -0.3% q/q & 3.0% y/y.

The AUD/USD has had a range of 0.6487 - 0.6504 in the Asia- Pac session, it is currently trading around 0.6490, -0.10%. The AUD initially tried to push higher after the CPI print but stalled above 0.6500 and drifted back lower for the rest of our session. The AUD finds itself firmly back in the middle of its recent multi-month range of 0.6350-0.6650 and will need a clearer direction from both the USD and risk to embark on a decent move in either direction. We are approaching the corporate month-end so there could be some demand for USD today or tomorrow which is worth looking out for.

• Underlying Inflation Picks Up But Volatile: July trimmed mean CPI inflation jumped to 2.7% y/y from 2.1% and headline to 2.8% from 1.9%. The monthly data are incomplete, for instance services aren’t updated in the first month of the quarter, and headline continues to be impacted in both directions by government electricity rebates. As a result, the RBA continues to focus on the quarterly data with Q3 not released until October 29. Comprehensive monthly CPI data is scheduled for November 26 but it will take time for seasonal trends to emerge.
• Narrow Rise In Construction Work: Q2 the real value of construction work done rose 3% q/q & 4.8% y/y, highest since Q4 2023 and , stronger than expected, after -0.3% q/q & 3.0% y/y. The rise was driven by engineering work with the building components lacklustre. Q2 GDP is released September 3 with private capex data Thursday, inventories September 1 and net exports and public demand contributions September 2
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6525(AUD695m). Upcoming Close Strikes : 0.6400(AUD571m Aug 28), 0.6500(AUD782m Aug 29), 0.6455(AUD555m Sept 1) - BBG
• AUD/JPY - Asia-Pac range 95.61 - 96.00, Asia is trading around 95.95. The pair continues to grind higher back towards the 96.00 area. This pair’s direction will be determined by the market's ability to follow on with this risk-on move or not. A sustained move back above 96.50 would turn the trend higher again but until then sellers should be around looking for this move to top out.

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P