AUD/JPY Price Forecast: Gathers strength as Trump meets Xi in Beijing, bullish bias prevails

AUD/JPY strengthens around 114.65 in Thursday’s early European session.
The constructive outlook of the cross prevails above the key 100-day EMA, with bullish RSI momentum.
The immediate resistance level emerges at 115.00; the initial support level to watch is 114.02.

Lallalit Srijandorn FXStreet

The AUD/JPY cross trades in positive territory near 114.65 during the early European session on Thursday. Traders will closely monitor the outcome of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing later on Thursday and Friday.

News agency Xinhua reported on Thursday that Xi Jinping told US CEOs accompanying Trump on a Beijing visit that China's door would only open wider, and that he believed US companies would have more opportunities in the country.

Xi met with the delegation of CEOs at the Great Hall of the People, which included Elon Musk, Jensen Huang of Nvidia (NVDA.O), and Tim Cook of Apple (AAPL.O). Trump stated on Tuesday that he would ask Xi to "open up" China when they met.

Technical Analysis:

In the daily chart, AUD/JPY remains in a constructive bullish bias as price holds well above the 100-day Simple Moving Average (SMA) and the Bollinger middle band, underscoring a firmly supported uptrend. The Relative Strength Index (14) at about 63 hovers in bullish territory without yet signaling extreme overbought conditions, suggesting buyers still retain the upper hand, albeit with scope for consolidation.

On the topside, immediate resistance is aligned with the Bollinger upper band and psychological level near 115.00, where a daily close above would open the door to further gains. On the downside, initial support emerges at the May 13 low of 114.02. The next contention level is seen at the Bollinger middle band around 113.80, followed by the lower band near 112.63, while the 100-day SMA at 110.18 provides a deeper structural floor if a broader correction unfolds.

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

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.

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