AUD/JPY Gains as Hawkish RBA Supports Move Near 112.50

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Key Moments

RBA Stance Supports AUD/JPY, but Intervention Risks Persist

AUD/JPY edged higher near 112.40 during Thursday’s early European session. The cross found support from the Reserve Bank of Australia’s hawkish tone. According to Macquarie analysts, the RBA will likely leave the Official Cash Rate unchanged next week. However, policymakers may deliver a hawkish message that reinforces expectations for a rate hike in August.

Even so, upside momentum could remain limited. Traders continue to monitor the risk of intervention by Japanese authorities. Finance Minister Satsuki Katayama recently warned that officials are watching speculative currency moves closely. Moreover, she stated that the government stands ready to take action if excessive Yen weakness continues.

Technical Picture: Uptrend Remains Intact Above 100-Day SMA

On the daily chart, AUD/JPY remains above the 100-day Simple Moving Average (SMA). Therefore, the broader bullish trend stays intact. Nevertheless, the pair has drifted toward the lower Bollinger Band near 112.26 in recent sessions.

Meanwhile, the Relative Strength Index (RSI 14) trades around 39. This reading suggests bearish momentum remains present. As a result, sellers may continue to apply pressure even though the pair still trades above key trend support.

On the upside, the first resistance zone appears near the Bollinger middle band at 113.62. If buyers regain control above that level, attention could shift toward the upper Bollinger Band near 115.00.

On the downside, initial support sits at 112.25 near the lower Bollinger Band. Below that, the 100-day SMA at 111.75 becomes the next important level. A break beneath this area could trigger a deeper correction. However, the broader trend would remain constructive unless selling pressure accelerates significantly.

Japanese Yen: Key Drivers to Watch

The Japanese Yen is one of the most actively traded currencies in the world. Several factors influence its value. These include Japan’s economic performance, Bank of Japan policy, bond yield differentials, and overall market sentiment.

In addition, the Bank of Japan plays a major role in currency markets. One of its responsibilities involves managing currency stability. As a result, investors closely monitor policy decisions and official comments.

The central bank has occasionally intervened in foreign-exchange markets. Such actions usually aim to influence the Yen’s value. However, political and international considerations often limit direct intervention.

Between 2013 and 2024, the BoJ maintained an ultra-loose monetary policy stance. Consequently, the Yen weakened against many major currencies as policy divergence widened. More recently, the central bank has begun to move away from that approach. Therefore, the Japanese currency has received additional support.

At the same time, narrowing bond-yield spreads have helped the Yen. For years, higher US Treasury yields favored the Dollar over the Japanese currency. However, BoJ normalization and rate cuts by other major central banks have started to reduce that gap.

Finally, investors widely view the Yen as a safe-haven asset. During periods of market stress, demand for the currency often increases. Consequently, risk-off sentiment tends to support Yen strength against higher-risk currencies.

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