AUD/JPY Price Forecast: Attracts some sellers, initial support level emerges above 102.50
The AUD/JPY cross attracts some sellers to around 105.00 during the early European session on Thursday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) amid growing acceptance that the Bank of Japan (BoJ) will stick to its policy normalization path. 
  • AUD/JPY softens to near 105.00 in Thursday’s early European session. 
  • The cross keeps the bullish vibe in the longer term, with an upward RSI momentum indicator. 
  • The first upside barrier emerges at 106.05; the initial support level is seen at 102.65.

The AUD/JPY cross attracts some sellers to around 105.00 during the early European session on Thursday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) amid growing acceptance that the Bank of Japan (BoJ) will stick to its policy normalization path. 

The latest report released by the BoJ for January revealed that the Japanese central bank makes no changes to any of their economic assessments of the nine Japanese regions covered. Most regions stated that regional economies were "recovering moderately" or "picking up moderately." 

Meanwhile, Australia’s mixed Consumer Price Index (CPI) inflation reading for November left the Reserve Bank of Australia’s (RBA) policy outlook uncertain, which weighs on the Aussie. Nonetheless, RBA Deputy Governor Andrew Hauser said on Thursday that the November inflation report was largely as expected, adding that the interest rate cuts are unlikely anytime soon.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY holds well above the rising 100-EMA at 100.79 and the 20-period SMA at 104.35, maintaining a bullish bias. The upward slope of both averages supports continuation, and pullbacks could find buyers near these gauges. RSI at 62.04 is neutral-bullish, confirming steady momentum without overbought conditions.

Bollinger Bands are rising and moderately widening, reflecting increasing volatility within the prevailing uptrend. Price trades above the middle band and leans toward the upper band at 106.05, which caps the near-term advance; a close above that barrier could extend the move, while failure to break would keep the pair consolidating toward the midline. Below the midline, the lower band at 102.65 defines stronger support.

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

Japanese Yen FAQs

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

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