AUD/JPY. Price Analysis. Forecast. The AUD/JPY Cross is Preparing for Growth

[Ben Graham]

The AUD/JPY exchange rate is facing difficulties in further growth as the Japanese yen gains support amid possible intervention measures from Japanese authorities. Japan's Finance Minister, Satsuki Katayama, stated on Monday that she has the authority to respond to excessive fluctuations in the yen.

These comments followed remarks from Atsushi Mimura, head of currency operations in Japan, who emphasized that officials would take appropriate measures to combat excessive exchange rate volatility and expressed concern about one-sided, sharp market movements.

The yen also received moderate support following Prime Minister Sanae Takaichi's statement that public debt remains high and that she is considering reducing new bond issuance in the budget for fiscal year 2026. Such a reduction could help stabilize or even raise yields on Japanese government bonds, narrowing the yield gap with foreign markets and providing support for the currency.

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However, this support is unlikely to be significant without concrete fiscal measures or changes in the Bank of Japan's policies. Takaichi stressed that responsible fiscal policy does not mean uncontrolled increases in debt or tax cuts.

Regarding the AUD/JPY exchange rate, growth is possible amid positive sentiment following the publication of the Reserve Bank of Australia's (RBA) minutes from its December monetary policy meeting. The document notes that board members are increasingly uncertain about the need to maintain a restrictive monetary policy, as signs of more resilient inflationary pressures than previously expected are emerging.

RBA representatives highlighted that monetary policy will be evaluated at future meetings. They also discussed whether interest rates will need to be raised at some point in 2026, expressing the view that a bit more time is needed to assess inflation's sustainability.

From a technical perspective, multiple bounces off the upward trend from the 100-SMA on the 4-hour chart, which have persisted for several weeks, favor the bulls. In addition, the oscillators on this chart are positive, further confirming the bullish sentiment. On the daily chart, oscillators are also positive, approaching overbought territory, indicating some consolidation. Nevertheless, the pair's path of least resistance remains upward.

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