AUD/JPY Price Forecast: Slips below 109.50 as outlook remains bearish beneath the 100-day SMA

• AUD/JPY eases towards 109.30 as Thursday’s European session gets under way.
• Authorities are prepared to intervene again in support of the Japanese Yen, Japanese officials have indicated.
• Below the 100-day SMA, the cross retains a bearish outlook, reinforced by negative RSI momentum.
• Resistance is first seen at 110.25, while 108.65 provides initial support.

Around 109.30, AUD/JPY is lower in early European trading on Thursday, with traders remaining alert to the possibility of Japanese authorities intervening in the currency market to bolster the Japanese Yen (JPY).

Recent currency movements have been excessively rapid, Japan’s top currency diplomat Atsushi Mimura said on Thursday. Declining to comment on particular exchange-rate levels, Mimura warned: “It’s too early to forget what happened this summer,”

Separately, the expected economic impact of earlier interest-rate increases requires attention, according to Bank of Japan (BoJ) board member Toichiro Asada. He also said underlying inflation is fluctuating around levels compatible with the BoJ’s price target. His dovish remarks could restrain JPY gains, thereby lending support to the cross.

Japanese household JGB demand rises as BoJ credibility underpins medium-term Yen gains

Official figures now substantiate a significant change in domestic demand for Japanese government bonds, according to MUFG analysts. As they explain, “the data confirming this pick-up in JGB buying by Japanese households comes from the MoF,” which “has an entire portion of its website dedicated to JGBs for individuals,” with issuance data that “show a marked pick-up in issuance to individuals with the November total for 3, 5 and 10-year totalling JPY 2,026bn, the largest single-month total.”

Speculation over policy is reinforcing the developing trend, MUFG says, citing “growing speculation that the government will soon make changes to incentivise JGB buying by including individual JGB holdings in tax-free NISA accounts and/or removing these holdings from inheritance tax.” The bank characterises the developments as “early signs of a shift in flows perhaps,” and contends that “the more examples of this we start to see the more compelling the case will become of a more sustained turnaround in the multi-year trend of yen weakness.” Against a backdrop of “intervention likely halting the prospects to the upside, and confidence in the BoJ improving,” its conclusion is that “the risks certainly look more skewed to yen strength over the medium term.”

BoJ’s Asada highlights neutral rates and cautions against aggressive tightening

A 3.2/10 reading on FXS Speechtracker puts BoJ board member Asada’s speech exactly at his historical average, suggesting no material change in tone. Although he recognises that underlying inflation is around target, his focus on accommodative financial conditions and neutral policy rates, together with warnings that additional increases could damage the economy and weaken core inflation, implies a mildly dovish bias for the Yen.

With growth and consumption weak, Asada argues that current price rises are not clearly being driven by demand. Any further rate increases, he stresses, must proceed cautiously and gradually. His emphasis on assessing overshoot risks through actual consumer inflation figures, combined with concerns that earlier and future hikes could suppress inflation by slowing growth, underlines a preference for gradual normalisation, limiting the Yen’s near-term scope to rise.

Technical Analysis: AUD/JPY stays under pressure beneath the 100-day SMA

Trading below both the 100-day simple moving average (SMA) and the middle Bollinger band leaves AUD/JPY with a bearish short-term bias on the daily chart. The price also sits well beneath the upper Bollinger band, highlighting the restraining influence of medium-term trend resistance. At 42.97, the Relative Strength Index (RSI) remains neutral to weak, suggesting modest downward momentum rather than outright exhaustion.

The middle Bollinger band, near 110.25, offers the first resistance on any advance. Clearing it decisively could open a path towards the key 110.70-110.75 resistance zone, where the 100-day SMA and upper Bollinger band lie. Beyond that, attention would turn to 113.61, the high recorded on 18 August.

Should the decline continue, sellers may become more cautious around the lower Bollinger band at 108.65, the next significant support. Further support lies at 108.24, the low of 6 November, ahead of the 13 February low at 107.70.

(The technical analysis of this story was written with the help of an AI tool. Know more.)