Will AUD/JPY hold above ¥108.29 support amid growing Bank of Japan policy risks?

Traders Union
All News
Currency
Australian Dollar vs yen drops 0.74% today

Highlights

Safe-haven demand for the Japanese Yen increased after signals of a possible Bank of Japan interest rate hike.
Expectations of tighter Japanese monetary policy raised return forecasts for Yen-denominated assets and prompted defensive positioning.
AUD/JPY trades below key moving averages with strong bearish momentum, and price is expected to remain between ¥108.29 to ¥109.37 over the next 2 to 3 days.

Safe-haven demand lifts yen on rate hike speculation

The Japanese Yen advanced against the Australian Dollar following increased safe-haven demand, as investors responded to signals of a possible Bank of Japan interest rate hike, according to FXStreet. The prospect of tighter Japanese monetary policy raised return expectations for Yen-denominated assets, driving capital flows toward the JPY. These developments supported currency buying by market participants seeking defensive positioning as policy risks grew.

Bearish momentum holds as multiple indicators signal selling stretch

On the hourly chart, AUD/JPY remains below the MA-20, MA-50, and long-term MA-200. The Ichimoku Kijun at ¥109.67 acts as immediate resistance. MACD and ADX both signal a bearish bias, while Bull/Bear Power remains negative, confirming seller dominance. RSI and CCI are in established oversold zones, indicating stretched selling that may prompt a short-term upside response. Stoch RSI is neutral, and the Awesome Oscillator aligns with the broader downtrend.

High downside risk persists amid limited rebound prospects

Looking ahead to the next 2–3 trading days, AUD/JPY is likely to hold within a typical volatility band between ¥108.29 and ¥109.37, with sideways price action expected. The probability of an upward move remains very low, while a downward move carries a very high probability should support at ¥108.29 be breached. Any rebound is likely to be limited while bearish momentum dominates, though a break above ¥109.67 could initiate a recovery toward higher resistance.

Anton Kharitonov, expert at Traders Union, sees continued downside risk for AUD/JPY as safe-haven flows support the Yen and policy tightening expectations persist. Technical signals remain bearish with negative momentum dominating, while key resistance at ¥109.67 holds. He maintains a cautious tactical bias, noting that any rebound is likely to be limited before key supports are breached. "Unless AUD/JPY reclaims ground above ¥109.67, I remain defensive and expect sellers to stay in control."

Earlier, analysts noted that Australian Dollar vs Japanese Yen was entrenched in a bearish trend, reflecting persistent downside pressure and limited prospects for recovery. The current analysis reinforces this outlook, with the focus now on the ¥108.29 support as a critical level that could open the way 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.