The AUD/JPY cross trades in positive territory near 111.80 during the early European session on Tuesday. The Australian Dollar (AUD) strengthens against the Japanese Yen (JPY) as China’s trade surplus grew more than expected at the beginning of 2026, driven by a significant surge in exports.
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said on Tuesday that volatility in oil prices and the Middle East is a genuine challenge for the central bank. Hauser further stated that the response depends on the size and persistence of the price shock, which is very uncertain.
Traders will closely monitor the developments surrounding the Middle East conflict. Any signs of escalating tensions or a prolonged war could boost the safe-haven currencies such as the JPY and act as a headwind for the cross.
Technical Analysis:
In the daily chart, AUD/JPY trades at 111.79. The near-term bias is bullish as price extends well above the rising 100-day exponential moving average near 105.60, confirming a mature uptrend rather than a short-term spike. Spot holds firmly above the Bollinger middle band around 110.10 and works closer to the upper band at 112.50, signalling persistent upside pressure within an expanding volatility backdrop. The RSI at 65 stays in bullish territory but below overbought extremes, indicating strong momentum with room for further gains before signals of exhaustion emerge.
Initial support is located at the Bollinger midline and recent consolidation area near 110.10, followed by stronger support at 109.20, where prior range highs align with the lower half of the recent band structure. A deeper pullback would expose the 107.70 area, which coincides with the lower Bollinger Band region from late February and guards the 100-day EMA zone around 105.60. On the topside, immediate resistance emerges at the current upper Bollinger Band near 112.50, with a sustained break opening the way toward the 114.00 region as the next upside target within the prevailing bullish trend.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
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.
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.
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.
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.
Source: https://www.fxstreet.com/news/aud-jpy-price-forecast-gains-traction-above-100-day-ema-with-bullish-rsi-momentum-202603100708
