AUD/JPY Price Forecast: Jumps towards 110.00 on JPY weakness

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY is upward biased, even though it has failed —so far, to clear the record high of 110.67, hit on February 10. Nevertheless, downside risks remain as the Relative Strength Index (RSI) shows some signs of weakness. Hence, if the index drops below the next cycle low of 56.55, the cross could follow suit, registering further losses.

For a bullish continuation, buyers need to conquer 110.00, followed by the year-to-date (YTD) high at 110.67. A breach of the latter will expose 111.00. On the downside, the first key support would be the 20-day Simple Moving Average (SMA) at 109.10. on further weakness, the next stop would be a key support trendline drawn from November 2025 lows, at around 108.00.

AUD/JPY Price Chart – Daily

Japanese Yen FAQs

What key factors drive the Japanese Yen?

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.

How do the decisions of the Bank of Japan impact the Japanese Yen?

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.

How does the differential between Japanese and US bond yields impact the Japanese 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.

How does broader risk sentiment impact the Japanese Yen?

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.