AUD/JPY pulls back from intra-day highs at 96.65, despite the favourable risk sentiment

• Aussie Dollar gains remain limited below 96.65 and maintains an immediate bearish trend in play.
• The Yen remains on the defensive, weighed by weaker demand for safe assets after the US-Japan deal.
• The dovish RBA minutes and weak Australian data are acting as headwinds for the AUD.

The Australian Dollar is one of the strongest performers in a risk-off session on Wednesday and is trading higher against the safe-haven Japanese Yen. The immediate AUD/JPY trend, however, remains bearish, in a sequence of lower highs since peaking at 97.45 last week, and with bulls capped below 96.60 so far today.

The Aussie rallied together with other risk-sensitive assets during Wednesday's Asian and European trading sessions, following US President Trump's announcement of a trade deal with Japan. This agreement has contributed to easing investors' fears about the uncertain outlook for global trade and boosted hopes of more such deals ahead of the August 1 deadline.

The Yen picks up after PM Ishiba denies rumours of resignation

The Japanese Yen drew some support in the Early European session as Japan's Prime Minister Ishiba stepped up to deny rumours spread by local media, suggesting that he might resign by the end of August. Ishiba´s comments have contributed to easing concerns about political uncertainty and have provided some support to the JPY.

In Australia, the minutes of the July 7-8 meeting revealed that some committee members voted for a 25 bps rate cut, which heightened market expectations that the bank might ease its monetary policy further after the August meeting, and increased negative pressure on the pair.

On Wednesday, the Australian Westpac Leading has failed to provide any significant support to the Aussie. The Index fell to 0.03% in June from the previous month's 0.1reading. These levels point to a weak economic growth that adds reasons for the RBA to continue cutting rates next month.