AUD/JPY Weakens in Early Asian Session
- The AUD/JPY pair weakens to near 100.00 in Friday’s early Asian session, down 0.50% on the day.
- Despite the decline, the cross maintains a bullish sentiment above the key 100-period EMA, but the RSI indicator indicates neutral momentum.
- Immediate resistance is situated at 100.73, while the first downside target is at the psychological level of 99.00.
The AUD/JPY cross continues its descent to around 100.00 during the early European session on Friday. This movement is driven by the Japanese Yen (JPY) gaining strength against the Australian Dollar (AUD) following comments made by Japan’s ministers earlier in the day.
Key Developments Impacting AUD/JPY
- Japan’s new economy minister, Ryosei Akazawa, emphasized that changes in the Bank of Japan’s (BoJ) monetary policy should align with the broader goal of exiting deflation.
- Chief Cabinet Secretary Yoshimasa Hayashi announced that Prime Minister Shigeru Ishiba has instructed the compilation of a comprehensive economic package and intends to submit a supplementary budget to Parliament after the lower house election.
Technical Analysis and Price Levels
Based on the 4-hour chart, the AUD/JPY cross maintains a positive outlook by remaining above the key 100-period Exponential Moving Averages (EMA). However, the Relative Strength Index (RSI) hovering around the midline suggests a neutral momentum for the cross.
The immediate resistance level is near the high of October at 100.73, with further upside barriers at 101.35 and the psychological level of 102.00. On the downside, the psychological support at 99.00 serves as an initial level, followed by the 98.45-98.65 region, and a potential target at 97.63.
Japanese Yen FAQs
FAQs About the Japanese Yen
- What Determines the Value of the Japanese Yen?
The value of the Japanese Yen (JPY) is influenced by factors such as the performance of the Japanese economy, the Bank of Japan’s policy, Japanese and US bond yield differentials, and trader sentiment.
- How Does the Bank of Japan Impact the Yen?
The Bank of Japan plays a crucial role in controlling the currency. Its policy decisions, including interventions in the currency market, affect the value of the Yen. Changes in BoJ policy and divergence from other central banks can impact the Yen’s value.
- What Role Does the BoJ’s Monetary Policy Play?
The BoJ’s ultra-loose monetary policy has led to a widening policy divergence with other central banks, impacting the Yen’s value. Recent shifts in BoJ policy and interest rate cuts by other central banks are narrowing this divergence.
- Is the Japanese Yen a Safe-Haven Investment?
The Japanese Yen is often considered a safe-haven currency, attracting investors during market turbulence due to its perceived stability. In times of uncertainty, the Yen tends to strengthen against riskier currencies.
Analysis of AUD/JPY Movement and Impact
The weakening of the AUD/JPY pair in Friday’s session reflects the impact of Japan’s economic announcements on the currency market. The bullish sentiment above the key EMA indicates ongoing positive movement, but the neutral RSI momentum suggests a potential consolidation phase.
Traders and investors should closely monitor the resistance levels at 100.73 and potential downside targets to make informed decisions regarding their positions in the AUD/JPY pair. Understanding the factors influencing the Japanese Yen’s value provides valuable insights into the broader dynamics of the currency market and its implications for global economic trends.