The Australian dollar faced renewed selling pressure on Wednesday as mixed Chinese purchasing managers’ index data and growing expectations of Bank of Japan policy normalization weighed on sentiment. The AUD/JPY pair slipped toward the 114.50 region but held above its 100-day simple moving average, while AUD/USD edged down around 0.2% to trade near 0.6570.
China’s official manufacturing PMI for March 2026 came in at 50.5, slightly above the 50.0 expansion threshold, but the non-manufacturing PMI fell to 50.8 from 51.4 in February. The mixed reading tempered optimism about China’s economic recovery, a key driver for Australian export demand, particularly for iron ore and coal. The Australian dollar initially spiked to 0.6585 after the manufacturing beat but quickly reversed as markets focused on softer services data and weak employment subindices.
Meanwhile, yen strength added pressure on the Australian dollar. Comments from Bank of Japan officials, including Governor Kazuo Ueda, signaled a willingness to adjust ultra-loose policy if inflation sustainably exceeds the 2% target. This contrasted with expectations that the Reserve Bank of Australia may cut interest rates later this year while the US Federal Reserve remains hawkish. Geopolitical tensions and global growth concerns also supported safe-haven flows into the yen.
Technical indicators suggest the broader bullish bias for AUD/JPY remains intact as long as the 100-day SMA support near 114.20 holds. Immediate resistance is seen at 115.50, with a more significant barrier at 116.00. For AUD/USD, traders see near-term support around 0.6500 and resistance near 0.6600, with upcoming US non-farm payrolls data likely to influence the next directional move.
