Incoming RBA Governor Philip Lowe has already demonstrated continuity with his predecessor Glenn Stevens. He's publicly doubted the usefulness of further monetary policy easing, and robustly defended RBA actions to a seemingly hostile parliamentary hearing. Unfortunately, he's also inherited a stubbornly strong AUD - offering a potential trade.

This week the Bank of Japan announced the results of a review of its actions over the last three years. It changed its monetary policy, giving up its annual pumping of 80 trillion JPY into the system. Instead, it will introduce "yield curve control", keeping the ten year bond yield at zero percent.  Many traders interpreted this as a stepping away, and JPY strengthened. So AUD/JPY went down, right?

Nope. Not for long, anyway.

The  daily chart shows a bounce after an intial slide. Note how the pair once again bounced off 76.00. Stronger commodity prices and a RBA Governor who doubts if cutting rates will help may be seen to support the AUD. Traders who agree may be buying AUD/JPY near current levels. An initial target near 79.00 is in sight, as is the stretch target at 81.00