The Japanese Yen (JPY) has shown signs of strength against the Australian Dollar (AUD) and the Euro (EUR) amid heightened market caution surrounding potential US-Iran peace talks and ongoing Middle East tensions. The AUD/JPY cross edged lower to around 113.95 during the early European session on Tuesday, as traders turned cautious ahead of negotiations involving US Vice President JD Vance, Jared Kushner, and special envoy Steve Witkoff, with the fate of the Iran ceasefire uncertain following US President Donald Trump's statement that he is unlikely to extend the two-week ceasefire with Iran. This uncertainty has increased the urgency for negotiators and is seen as a factor supporting the safe-haven appeal of the JPY, potentially acting as a headwind for AUD/JPY [1].
Technical analysis for AUD/JPY indicates a bullish near-term bias, with the price holding above the 20-day Bollinger simple moving average and the 100-day exponential moving average (EMA). The Relative Strength Index (RSI) at 67.56 suggests strong but stretched upside momentum. Initial support is noted at the Bollinger middle band around 111.75, with deeper correction levels at the 100-day EMA (108.51) and lower Bollinger band (108.41). A sustained break above the upper band at 115.10 could lead to further gains, though momentum may slow ahead of this barrier [1].
Meanwhile, the EUR/JPY cross is trading nearly unchanged around 187.20-187.25, remaining close to its highest level since August 1990. The JPY weakened slightly following a Reuters report that the Bank of Japan (BoJ) is increasingly likely to hold interest rates steady at its upcoming April meeting. Economic concerns from the Middle East conflict and risks to energy supplies due to disruptions in the Strait of Hormuz are cited as key factors supporting EUR/JPY. The BoJ is expected to signal readiness to hike rates in June as imported energy costs impact inflation, and speculation about Japanese authorities intervening to stem further currency weakness is holding back aggressive JPY selling. A modest US Dollar uptick is also weighing on the EUR, capping upside for EUR/JPY [2].
Technical analysis for EUR/JPY shows a bullish structure, with repeated rebounds from the 100-day EMA and a positive MACD histogram. The RSI is around 64, indicating strong but not extreme buying pressure. Initial support is at the 100-day EMA near 183.04, and unless EUR/JPY slides below this level, the technical setup suggests potential for further gains, with any consolidation above the moving average likely viewed as a pause within the prevailing uptrend [2].
CONCLUSION
Both AUD/JPY and EUR/JPY crosses are influenced by the Japanese Yen's safe-haven status amid geopolitical uncertainty and central bank policy expectations. Technical indicators for both pairs suggest a bullish bias, though market caution and potential interventions may limit aggressive moves. Traders are closely monitoring developments in the Middle East and the Bank of Japan's upcoming decisions for further direction.