The AUD/JPY currency pair traded in negative territory near 112.35 during the early European session on Thursday, as the Japanese Yen edged higher against the Australian Dollar. This movement comes amid heightened trader vigilance for potential intervention by authorities to support the Yen, reflecting ongoing concerns about pronounced Yen weakness and shifting FX dynamics [1]. Reserve Bank of Australia Governor Michele Bullock is scheduled to speak later on Friday, which may provide further direction for the pair [1].
Goldman Sachs Research strategist Karen Fishman commented that recent gains in the Yen are fading, noting that intervention is "not a sustainable fix ... ultimately just buys some time" [1]. Meanwhile, the Bank of Japan's summary of opinions from its July meeting highlighted growing risks of accelerating inflation, with one board member suggesting that the pace of interest rate hikes could accelerate. The BoJ may consider an additional interest rate increase at its next September policy meeting, following a hike in June, in response to rising inflation risks, according to Jiji [1].
DBS Group Research emphasized the rarity of coordinated FX intervention between the US and Japan, pointing out that the last joint intervention occurred 15 years ago in the aftermath of the 2011 Tohoku earthquake to weaken an excessively over-valued JPY. The current episode is notable for policymakers deploying similarly uncommon tools, but this time in response to Yen weakness rather than strength [1].
Technical analysis indicates a bearish near-term bias for AUD/JPY, as the pair slipped below the Bollinger Bands 20-period simple moving average and remains capped by the 100-day simple moving average. The Relative Strength Index (14) reading at 48.96 suggests momentum has turned neutral-to-soft after a recent rally stalled. Key resistance levels are at 112.70 and 112.90, while primary support is at the August 10 low of 111.63, with further downside levels at 110.77 and 110.00. A decisive move below these supports could signal a deeper corrective phase within the broader trend [1].
CONCLUSION
AUD/JPY is under pressure as the Yen strengthens amid speculation of further intervention and potential BoJ rate hikes. Technical signals point to a bearish bias in the near term, with key support and resistance levels in focus. Market participants are awaiting further guidance from upcoming central bank commentary and policy decisions.