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FXstreet.com (Barcelona) - AUD/JPY has been directly offered since the start of the Asians session, touching a new 2012 low at 80.39, marginally surpassing recent NY lows. After five consecutive days of lower highs & lows, Westpac FX Strategist Sean Callow, has put out a note informing the bank has just taken profit at 80.55 on their short AUD/JPY trade recommendation, which was originally entered via options on 23 March with a spot reference of 86.00.

"We regarded AUD as vulnerable to cooler growth in China, the Eurozone and the US, a view broadly borne out by both data momentum and lower commodity prices. The yen has also strengthened about as expected, with long USD/JPY speculative positions (proxied by IMM data) steadily trimmed from their post-2007 extremes of late March (albeit not as far as expected) and Japan's demand for foreign assets lukewarm" explains Mr. Callow.

From here, Mr. Callow sees risks on AUD and JPY less lopsided: "With Japan MoF intervention risk seemingly rising by the day and AUD now pricing in plenty of bad news, illustrated by interest rate markets implying a further -100bp in RBA cash rate cuts, which seems ample - probably excessive - so long as Chinese growth remains near expectations and Australia is on track for 3% growth in 2012 (Westpac's base case)."

The Analyst concludes: "We still see limited upside risk on AUD/JPY near term but prefer to be flat on this cross for now."

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