AUD/JPY slumps below 98.00 as Australian Unemployment Rate climbs to four-year high of 4.5%

• AUD/JPY tumbles to around 97.70 in Thursday's early Asian session, down 0.43% on the day.
• Australia's Unemployment Rate hit a four-year high in September. 
• The prospect that Japan's political uncertainty may delay the BoJ rate hike might cap the downside for the cross. 

The AUD/JPY cross falls to near 97.70 during the early Asian session on Thursday. The Australian Dollar (AUD) weakens against the Japanese Yen (JPY) after the release of Australia's employment report for September. The Bank of Japan (BoJ) board member Naoki Tamura is set to speak later on Thursday. 

Data released by the Australian Bureau of Statistics (ABS) on Thursday showed that the Unemployment Rate in Australia jumped to 4.5% in September from 4.3% in August (revised from 4.2%), above the market consensus of 4.3%. This figure registered the highest seasonally adjusted rate recorded since November 2021. 

Meanwhile, the Australian Employment Change came in at 14.9K in September versus -11.8K prior (revised from -5.4K). This figure came in worse than the expectation of 17K. 

The Aussie faces some selling pressure in an immediate reaction to the downbeat employment data. The report signaled the labor market is loosening and added to the case for the Reserve Bank of Australia (RBA) to resume lowering interest rates as soon as next month.

RBA Governor Michele Bullock said on Thursday that a pickup in consumer spending and higher readings on some parts of inflation had given policymakers pause to consider whether further interest rate cuts were needed.

On the other hand, political uncertainty in Japan could put pressure on the Bank of Japan (BoJ) to delay interest rate hikes. This, in turn, could weigh on the JPY and cap the downside for the cross. The Liberal Democratic Party (LDP)-Komeito coalition came to an abrupt end last week. The development means the newly elected LDP leader, Sanae Takaichi, would need support from other parties to confirm her as Japan's first female Prime Minister and for her key policies.