AUD/JPY remains in the red after dismal China data

• AUD/JPY remains depressed after weaker-than-expected China data.
• China's industrial production growth hit lowest in 17.5 years in August.
• China data may add to bearish pressures around equities, pushing JPY higher.

AUD/JPY gapped lower in early Asia, courtesy of oil-led risk-off in markets and continues to trade in the red following the release of the horribly weak China data. 

The AUD/JPY pair is currently trading around 74.00 – the level seen before China released its data at 02:00 GMT – representing 0.47% losses on the day.

China's Industrial Production data growth skidded to its weakest pace in 17 years and a half in August, expanding just 4.4% year-on-year, missing the analysts'expectation of a 5.2% rise.

Further, Retail Sales growth slowed to 7.5%, compared with 7.6% in July. Analysts surveyed by Reuters had expected growth of 7.9%.

So far, the data has done little damage to the already weak AUD/JPY pair. However, risk aversion may worsen during the day ahead due to China data, leading to a further rise in demand for the anti-risk Japanese Yen and a deeper decline in AUD/JPY. 

The currency pair gapped lower at 73.75 earlier today as oil gapped higher in Asia by 20%, courtesy of Saturday's attack on Saudi Aramco's plant. Oil has since then trimmed gains but is still up more than 10%. The futures on the S&P 500 are also reporting a 0.64% drop.

Technical levels