• AUD/JPY has slipped sharply below 92.00 as the focus has shifted to Australian Retail Sales data.
• Australian monthly Retail Sales data might show resilience due to revenge buying after three straight Covid Christmases.
• In addition to higher Australian CPI (Q4CY2022), higher Retail Sales might bolster the odds of a hawkish RBA policy.

The AUD/JPY pair has corrected firmly below the crucial support of 92.00 in the early Asian session. The risk barometer witnessed a steep fall after failing to extend recovery above 92.30. Considering the downside traction in the AUD/USD pair, AUD/JPY is following the footprint and is demonstrating a risk-off mood.

The cross is expected to meet sheer volatility ahead as the Australian Bureau of Statistics will report monthly Retail Sales (Dec) data. Global Strategy Team at TD Securities (TDS) sounds optimistic and expects Australian Retail Sales to rise by 0.5% in December. A note from TD Securities indicates that the Australian economy will continue November’s outperformance as three straight COVID Christmases have forced individuals to revenge buying.

An incline in consumer spending might create more troubles for the Reserve Bank of Australia (RBA) policymakers. The recent surge in fourth-quarter Consumer Price Index (CPI) figures in Australia is already compelling RBA Governor Philip Lowe to continue hiking interest rates further. And, now higher consumer spending might force the RBA to sound more hawkish than casual.

On the Japanese Yen front, investors are keeping an eye on the release of the employment data. The Job/Applicant ratio is expected to escalate to 1.36 from the prior release of 1.35. While the Unemployment Rate is seen unchanged at 2.5%. Apart from that, Retail Trade data is in focus. The annual Retail Trade (Dec) is seen higher at 3.0% vs. the prior release of 2.6%.