• Japan is a major importer of commodities. Higher commodity prices could hurt its fiscal deficit.

• A positive risk barometer cross signifies a market risk-on impulse.

The AUD/JPY currency pair saw a bullish open drive Monday. It settled above 85.50 in spite of the risk-on impulse. According to Reuters, the prints of officials from Russia and Ukraine highlight the progress in peace negotiations and claim positive outcomes within a matter of days.

After breaking 85.50, the risk barometer has made significant progress and is currently trading at 85.80 as of this writing. The rising global metal prices have led to the extension of the gains in the risk indicator. Rising metal prices and Australia's position as a major exporter has strengthened the Aussie against the Japanese currency.

As the Asian major is the largest crude oil importer in the world, the Japanese yen has seen a wider sell-off. The threat of a wider cash outflow from Japan due to rising oil prices and the abandonment of Russian oil imports has led to a rise in the price of oil.

It is important to note that the wide-based underperformance in the Japanese yen can also be attributed to the poor performance of Japan’s macroeconomics. The Cabinet Office's Japan's quarterly GDP came in at 1.1% last week. This is lower than street estimates and the previous print of 1.4% & 1.3%, respectively.

The commodity prices have already risen due to geopolitical tensions between Russia, Ukraine and Japan. Japan is a major importer and exporter of commodities. Investors will be interested in headlines about Ukraine. China's Annual Retail Sales will be the highlight of Tuesday. The preliminary print of February Retail Sales at 3% is higher than the 1.7% figure, which may help to keep the Aussie strong.