Australian Dollar vs. Japanese Yen: A Sharp Decline Amid Chinese Weakness

The AUD/JPY pair collapsed to a near 103.15 level during the early European session on Monday, 15 December 2025, underscoring the immediate impact of China‑driven sentiment on the Australian dollar. The fall was not an isolated event; it followed a consistent pattern of weak economic data from China, the nation that remains Australia’s largest trading partner.

Weak Chinese Data Undermine the “China‑Proxy Aussie”

China’s November retail sales registered a 1.3 % year‑over‑year increase, a stark decline from October’s 2.9 %. Industrial production, meanwhile, rose by 4.8 % year‑over‑year, slipping below the consensus estimate of 5.0 %. These figures were reported by the National Bureau of Statistics (NBS) and are far below the 2.9 % growth forecast for retail sales. The downturn in consumer spending and factory output suggests a slowdown in the world’s second‑largest economy, casting a negative shadow on the Australian dollar that benefits from robust commodity exports to China.

Technical Analysis: Bullish Bias Holds, but Resilience Is Tested

On the daily chart, the pair sits comfortably above the 100‑day exponential moving average (EMA) at 99.38, reinforcing a medium‑term bullish bias. The EMA’s steady ascent signals sustained demand for AUD in yen terms. Moreover, the price remains above the Bollinger Bands’ midline (102.42) and the RSI indicates a bullish stance. However, the early‑morning dip to 103.15 reveals that the pair is now testing its first key resistance at 104.42, with a lower immediate barrier at 102.42. If the AUD/JPY can break above 104.42, it would confirm the bullish case; failure to do so could signal a reversal or a more pronounced pullback.

Market Focus: BoJ’s Interest‑Rate Decision

All eyes are on the Bank of Japan (BoJ) as it prepares for its December monetary policy meeting. Market expectations lean toward an interest‑rate hike to 0.75 %—the first increase in several years. A higher JPY would typically weigh on the AUD, but the current momentum suggests that any yen appreciation could be offset by a resurgence in commodity demand or a shift in risk sentiment. Traders must therefore watch both the BoJ decision and any subsequent volatility in the pair.

The Bottom Line

The AUD/JPY’s slide to 103.15 is a direct reflection of China’s economic malaise. While the pair’s technicals still support a bullish outlook, the resistance at 104.42 represents a critical threshold. Should the Australian dollar fail to breach this level, the bearish influence of China could reignite, forcing a deeper correction. Investors should remain vigilant, balancing the technical signals against the evolving macro backdrop of China and the BoJ’s policy direction.