RBA inflation credibility concern weighs on Australian dollar to Japanese yen exchange rate amid weak momentum

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Australian Dollar vs Yen drops 1.35% today

Highlights

The Reserve Bank of Australia delivered its fifth rate hike of the year while warning that public confidence in inflation control is eroding.
The yen advanced for a second session and the US Dollar reached a one-month low, increasing demand for safe haven currencies and adding pressure on AUD/JPY.
AUD/JPY trades below major moving averages with bearish technical signals, projected to range between ¥109.02 and ¥110.12 with downside favored.

Aussie pressured as RBA caution fuels yen demand

The Reserve Bank of Australia announced its fifth interest rate hike of the year, as reported by Investing.com, accompanied by Deputy Governor Andrew Hauser's warning that the public's confidence in the bank's ability to manage inflation is slipping. This cautious central bank communication has the potential to undermine support for the Australian Dollar despite tighter monetary policy. Separately, FXStreet reported that the yen strengthened for a second consecutive session after the US Dollar fell to a one-month low amid political uncertainty, increasing demand for safe haven currencies and contributing to further pressure on AUD/JPY.

Technical barriers reinforce selling as rebound risk grows

On an hourly basis, AUD/JPY is trading below the MA-20 and MA-50, while on the daily chart it sits well beneath the MA-200. The Ichimoku Kijun at ¥110.4 defines immediate resistance, with key support at ¥109.02 and a technical ceiling still in place. Momentum indicators—including MACD and ADX—show persistent bearish signals. Meanwhile, RSI, Stoch RSI, and CCI are in oversold territory, highlighting the mounting risk of a short-lived rebound as selling pressure has become extended. Negative Bull/Bear Power and readings from the Awesome Oscillator underline the dominance of sellers and reinforce the intraday bearish bias.

Bearish bias persists under resistance as downside risk builds

In the short term, AUD/JPY is likely to stay in a ¥109.02 to ¥110.12 range, reflecting typical volatility relative to the current session. The probability of an upward move is considered very low: barring a break above resistance at ¥110.4, a rebound scenario remains unlikely. Should the pair breach support at ¥109.02, this would open the way for additional declines. The baseline scenario anticipates continued rangebound trading with further bearish pressure prevailing barring any significant reversal catalysts.

Anton Kharitonov, expert at Traders Union, sees persistent bearish momentum in AUD/JPY driven by cautious central bank signals and renewed safe-haven demand for the yen. He notes that technical indicators confirm negative sentiment, with key support at ¥109.02 and oversold readings limiting rebound potential. The analyst expects downward pressure to dominate unless resistance at ¥110.4 is reclaimed. "For now, the case for sustained recovery is weak — I remain defensive unless the pair retakes ¥110.4 with conviction."

Earlier, analysts noted that AUD/JPY was entrenched in a bearish trend, reflecting persistent downside pressure and limited prospects for recovery. The current technical and macroeconomic landscape reinforces this bearish bias, with traders advised to monitor the ¥109.02 support level as a potential trigger for further declines if breached.

Source of Data: AUD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.