AUD/JPY Price Forecast: Slips to near 114.00, but maintains bullish structure above 100-day average

AUD/JPY attracts some sellers to near 114.00 in Friday’s early Asian session.
The positive tone of the cross remains intact above the key 100-day EMA, with bullish RSI momentum.
The first upside barrier to watch is 114.95; the initial support level is located at 113.80.

Lallalit Srijandorn FXStreet

The AUD/JPY cross trades in negative territory around 114.00 during the early European session on Friday. The China-proxy Australian Dollar (AUD) softens against the Japanese Yen (JPY) amid the lack of progress to open the Strait of Hormuz. US President Donald Trump said that he had struck “fantastic trade deals” with Chinese President Xi Jinping as he wrapped up his Beijing visit on Friday.

On Iran, Trump said, "We’ve settled a lot of different problems that other people wouldn’t have been able to solve.” However, uncertainty remains high, and markets will keep a close eye on the second day of a high-stakes summit between Trump and Xi Jinping for more details.

Technical Analysis:

In the daily chart, AUD/JPY holds a bullish near-term bias as it consolidates above the 100-day Simple Moving Average (SMA)and the Bollinger Bands’ midline. Price is pressing into the upper half of the recent volatility envelope, with the upper Bollinger Band lurking overhead, while a moderately positive Relative Strength Index (RSI) around 57 suggests steady, rather than overextended, upside momentum.

On the topside, immediate resistance is located at the Bollinger upper band near 114.95, where a clear daily close above would open the way for a fresh leg higher. On the downside, initial support is seen at the Bollinger middle band around 113.80, followed by the lower band near 112.65, with the 100-day SMA at 110.27 providing a deeper trend support area 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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