The AUD/JPY cross gathers strength to around 102.75 during the early European session on Thursday. Diminishing odds for more policy easing by the Reserve Bank of Australia (RBA) could provide some support to the Aussie against the Japanese Yen (JPY) in the near term.
The Australian central bank is widely expected to hold its cash rate steady at 3.60% at its upcoming monetary policy meeting next week. Some analysts anticipate the next move from the RBA could be a rate hike in the first half of 2026, or at least a prolonged hold, as inflation risks grow.
Technical Analysis:
In the daily chart, AUD/JPY trades at 102.79. Price holds above the 20-day SMA at 101.41 and well above the 100-day EMA at 98.75. Both averages rise, confirming a firm bullish bias. Bollinger Bands slope higher and spot hovers near the upper envelope, indicating persistent buy-side pressure and stretched conditions. RSI(14) prints 65.02, bullish without overbought.
Immediate resistance stands at the upper Bollinger Band at 102.88. Initial support aligns with the mid-band at 101.41, with the lower band at 99.94 and the 100-day EMA at 98.75 underpinning the broader trend. Momentum stays firm, and pullbacks would be viewed as corrective while the pair holds above the 20-day baseline.
(The technical analysis of this story was written with the help of an AI tool)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Source: https://www.fxstreet.com/news/aud-jpy-price-forecast-strengthens-above-10250-supported-by-bullish-technical-indicators-202512040546
