Forex Market Update: Australian Dollar/Japanese Yen

The Australian Dollar (AUD) against the Japanese Yen (JPY) has shown notable movements recently, with the pair resuming its upward journey above the 100-day Exponential Moving Average (EMA) near 95.50. As of the latest reports, AUD/JPY edged higher to around 95.45 in the early European session on Friday, marking a 0.24% increase for the day. This positive trend is supported by the pair’s position above the 100-day EMA, although further consolidation in the near term cannot be ruled out.

Technical Analysis and Market Outlook

The immediate resistance level for AUD/JPY is identified in the 96.00-96.10 zone, while the initial support level is located at 95.10. The upward bias of the pair is technically reinforced as it crosses above the key 100-day EMA, attracting buyers around the 95.45 mark. However, market participants remain cautious, acknowledging the potential for short-term consolidation.

Factors Influencing the Pair

A significant factor influencing the AUD/JPY pair is the uncertainty surrounding the timing of the next interest rate hike by the Bank of Japan (BoJ). This uncertainty continues to exert downward pressure on the Japanese Yen, providing a tailwind for the AUD/JPY cross. The lack of clarity on BoJ’s monetary policy decisions adds to the volatility and speculative interest in the pair.

Recent Market Developments

Earlier in the week, on August 21, 2025, AUD/JPY experienced a decline, slipping near 94.50. This movement was attributed to easing inflation expectations in Australia. Consumer inflation expectations in August rose by 3.9%, down from 4.7% previously. Additionally, the S&P Global Economic Activity Index (EMI) for Australia’s manufacturing sector increased to 52.9 in August, while the services EMI climbed to 55.1. Despite these positive indicators, the Japanese Yen faced challenges due to ongoing uncertainties.

Summary

In summary, the AUD/JPY pair has resumed its upward trajectory, buoyed by technical indicators and external factors such as BoJ’s interest rate policy uncertainty. While the immediate outlook remains positive, traders are advised to monitor potential consolidation phases and macroeconomic developments that could impact the pair’s direction.