AUD/JPY Price Forecast: Gains ground to near 114.50, bullish tone prevails above 100-day SMA

AUD/JPY gathers strength to around 114.45 in Thursday’s early European session.
The constructive view of the cross remains intact above the 100-day SMA, with bullish RSI momentum.
The first upside barrier emerges at 115.00; the initial support level to watch is 113.60.

Lallalit Srijandorn FXStreet

The AUD/JPY cross trades in positive territory near 114.45 during the early European trading hours on Thursday. The Australian Dollar (AUD) strengthens against the Japanese Yen (JPY) as hotter-than-expected Australian Consumer Price Index (CPI) inflation data has bolstered market expectations for a Reserve Bank of Australia (RBA) interest rate hike.

Traders are repricing the risk of a fourth rate increase from the Australian central bank this year, with a move in September now priced at 38%, up from just 17% before, according to Reuters. They are now fully expecting a rate hike by February next year.

Data released by the Australian Bureau of Statistics showed on Wednesday that the monthly CPI climbed 1.0% in July, versus a decline of 0.1% in June, exceeding forecasts of a 0.8% rise.

Bank of Japan (BoJ) Deputy Governor Ryozo Himino on Thursday emphasized the need for timely interest rate hikes with a ‌focus on mounting inflation risks, adding that dominant market expectations for a near-term increase in borrowing costs. However, Himino refrained from giving explicit signals on the timing of the next rate increase, saying only that "in-depth deliberations" on price pressures should be held at each policy meeting.

Japan intervention fears and BoJ hike prospects keep JPY supported

Rabobank’s FX strategists argue that the policy mix in Japan remains central to the Yen outlook. They note that “if the BoJ does hike rates, the MoF may repeat its July strategy of fanning the market move with more intervention,” reinforcing the impact of any policy shift. In their view, “fear of further FX intervention in support of the JPY coupled with the prospect of a BoJ September rate hike and the softer USD suggests scope for USD/JPY to trade in the 158-157 area on a 3-to-6-month view.”

Technical Analysis: AUD/JPY keeps a bullish vibe in the near term

In the daily chart, AUD/JPY extends its advance above the 100-day Simple Moving Average (SMA) and the 20-day Bollinger middle band, which both reinforce a constructive bullish bias. Price is now pressing toward the upper Bollinger Band, while the Relative Strength Index (14) at 64.33 stays in positive territory, hinting that upward momentum remains firm though edging closer to overbought conditions.

On the topside, immediate resistance emerges at the upper Bollinger Band around 115.00, where fresh supply could slow the rally. Any follow though buying above this level could pave the way to 115.50.

On the downside, initial support level is located at the August 24 low of 113.60, followed by the 100-day SMA at 113.20. A decisive break below the latter could expose the 20-day Bollinger middle band near 112.55, with a deeper structural floor aligning with the lower Bollinger Band around 110.15 if a broader correction unfolds.

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

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.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.