AUD/JPY Price Forecast: Gains momentum, bullish bias prevails above 100-day EMA
- AUD/JPY strengthens to near 111.80 in Wednesday’s Asian session.
- The cross maintains the constructive outlook above the 100-day EMA, with bullish RSI momentum.
- The initial support level is located at 111.00; the first upside barrier emerges at 112.50.
The AUD/JPY cross gathers strength to around 111.80 during the Asian trading hours on Wednesday. The Australian Dollar (AUD) edges higher against the Japanese Yen (JPY) amid improved risk sentiment. US President Donald Trump said late Tuesday that he had agreed "to suspend the bombing and attack of Iran for a period of two weeks” on the condition that Iran reopens the Strait of Hormuz.
Iranian Foreign Minister Seyed Abbas Araghchi stated that during the two weeks, safe passage through the Strait of Hormuz “will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations.” Easing tensions in the Middle East undermines a safe-haven currency such as the JPY and acts as a tailwind for the cross in the near term.
On the other hand, fears that Japanese authorities would step in to support the domestic currency might cap the downside for the JPY. Japan's top currency diplomat Atsushi Mimura said last week that officials may need to take "decisive" steps if speculative moves persist in the currency market.
Technical Analysis:
In the daily chart, the near-term bias of AUD/JPY is bullish as price extends its advance well above the 100-day exponential moving average around 107.50, confirming a dominant uptrend and resilient dip demand. The latest candles hold in the upper half of the Bollinger Band envelope, while the bands remain relatively wide, signalling sustained upside momentum rather than a volatility blow-off. RSI has rebounded toward the high-50s, recovering from mid-range readings and aligning with renewed buying pressure after the recent consolidation above the 111.00 handle.
Initial support emerges at 111.00, where recent lows converge with the mid-Bollinger zone, and a break below would expose deeper pullback risk toward the 110.00 area. Stronger downside protection aligns near the 109.00 region, close to the Bollinger lower band cluster and prior congestion, and a loss of this floor would weaken the broader bullish structure. On the topside, immediate resistance stands at the March 19 high of 112.61, followed by the upper boundary of the Bollinger Band of 113.15.
(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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