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AUD/JPY slips below 112.50 as yen strength fades
The yen’s edge versus the Australian dollar is tempering as traders look ahead to an RBA speech and possible Bank of Japan rate-hike decisions.
The AUD/JPY cross traded near 112.35 in early European trade, holding in negative territory and under 112.50 as the Japanese yen edged higher against the Australian dollar. FXStreet said traders are closely watching for further currency intervention, after earlier support moves sparked attention.
FXStreet also pointed to shifting expectations for Japanese policy. Goldman Sachs Research strategist Karen Fishman said the yen gains are fading because intervention is “not a sustainable fix,” while the Bank of Japan’s July summary of opinions highlighted risks of inflation accelerating, with one board member indicating the pace of hikes could quicken. The BoJ could consider an additional rate increase at its next September meeting following its June hike.
On the Australian side, FXStreet noted Reserve Bank of Australia Governor Michele Bullock is scheduled to speak later Friday. Separately, DBS Group Research characterized the recent currency support as unusual, saying coordinated FX intervention between the US and Japan is rare, with the last joint intervention occurring 15 years ago after the 2011 Tohoku earthquake to weaken an excessively overvalued yen.
Technically, FXStreet said AUD/JPY has a near-term bearish tilt, slipping back under the Bollinger Bands 20-period simple moving average and staying capped by the 100-day SMA. It flagged resistance around 112.70, then 112.90, while support to watch is at the August 10 low of 111.63, followed by 110.77 and the Bollinger lower band near 110.00.