AUD further supported by fading fear on Omicron and rising risk appetite, Japan downgraded its Q3 GDP growth

As the fear over Omicron fades away, global risk appetite rises again. Stock markets in both Asia and the US have bounced back, and riskier currencies like AUD hit the strongest level in a week on Wednesday. AUDUSD is currently trading at 0.7131, up 0.18%. The latest news on the variant shows that the variant will still be vulnerable to existing vaccines and is far less severe than other variants.

Japan revised its Q3 GDP growth from -3% to -3.6% on an annualized rate, worse than the forecast at -3.1%. The latest data showed that both public investment and capital spending have shrunk. On Wednesday, Japan has released its latest decision to raise national wages. The government will deny certain tax breaks to big companies that do not raise wages. On the other hand, those who raise wages by 4% will receive deductions up to 30% of their taxable income. OECD data shows that Japanese wages have remained flat for the past 30 years.