AUD/JPY Price Forecast: Jumps towards 110.00 on JPY weakness
- AUD/JPY climbs after Sanae Takaichi signals resistance to more hikes by Bank of Japan.
- Bullish bias intact, though RSI hints at fading momentum near record highs.
- Break above 110.67 exposes 111.00, while 109.10 and 108.00 guard downside.
The AUD/JPY surges late in the North American session, up by over 0.83% as the Japanese Yen weakens as PM Takaichi expressed stronger resistance to further tightening by the Bank of Japan, led by Governor Ueda. Also, expectations that Australian CPI data would continue to remain hot, keeps the cross underpinned near the 110.00 milestone.
AUD/JPY Price Forecast: Technical outlook
The AUD/JPY is upward biased, even though it has failed âso 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 â Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the worldâs most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japanâs policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japanâs 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 BoJâs 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 Yenâs value against other currencies seen as more risky to invest in.
