AUD/JPY Price Forecast: Uptrend intact despite dip below 111.00
The rally on the AUD/JPY was halted on Thursday as the cross-pair retreated some 0.40% during the session on broad strength of the Japanese Yen. Hawkish comments by two officials of the Bank of Japan, weighed on the pair, which trades below the 111.00 mark at the time of writing.
  • AUD/JPY slips 0.40% as hawkish remarks from Bank of Japan officials lift the Yen.
  • Uptrend remains intact with higher highs and higher lows still in place.
  • Break above 111.00 targets 111.47 and 112.00, while 110.00 guards downside.

The rally on the AUD/JPY was halted on Thursday as the cross-pair retreated some 0.40% during the session on broad strength of the Japanese Yen. Hawkish comments by two officials of the Bank of Japan, weighed on the pair, which trades below the 111.00 mark at the time of writing.

AUD/JPY Price Forecast: Technical outlook

The uptrend remains intact on the AUD/JPY which despite testing daily lows of 110.26, its is poised to end Thursday’s session near the highs, opening the door for further upside.

The Relative Strength Index (RSI) showed that buyers are in charge, with the index above its neutral line, but slightly tilted to the downside, an indication that traders could push the AUD/JPY to challenge the 110.00 mark.

Nevertheless, price action remains constructive as the AUD/JPY registered successive series of higher highs and higher lows. Therefore, for a bullish continuation, the pair must clear 111.00, followed by the yearly high of 111.47. Once cleared the next stop would be 112.00.

On the other hand, on further weakness, the AUD/JPY first support would be the day’s low of 110.26, followed by 110.00. Should the pair clear the latter, a drop towards the 20-day Simple Moving Average (SMA) at 109.48 is on the cards.

AUD/JPY Price Chart – Daily

AUD/JPY Daily Chart

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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