AUD/JPY Price Forecast: Falling wedge breakout puts 112.00 in play

AUD/JPY surges above falling wedge resistance, strengthening the bullish outlook.
Buyers target 111.13 before challenging SMA confluence at 111.64-111.71.
Break above 112.00 exposes 100-day SMA at 112.19 next.

The AUD/JPY advances late on Monday during the North American session, up 0.88%, as the cross-pair continues to trade above the resistance trendline of a ‘falling wedge,’ a bullish chart pattern that could open the door to testing higher prices. At the time of writing, the AUD/JPY trades at 110.64 after bouncing off the low of the day (LOD) of 109.86.

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AUD/JPY Price Forecast: Technical outlook

Price action suggests that further upside is seen, with initial resistance resting at 111.13, the October 14 high of the day (HOD), which could act as a magnet and lift the AUD/JPY as the confluence of the 50- and 200-day Simple Moving Average (SMA) emerges as the next key resistance near 111.64-111.71. Once this area is surpassed, it will expose 112.00 and the 100-day SMA at 112.19.

On the downside, the first support for AUD/JPY is the 110.00 psychological level. A move below this milestone and towards a previous resistance trendline-turned-support at the 109.00-109.30 range are on the cards. Beneath is 109.00, followed by the October 15 low of 108.64.

AUD/JPY Price Chart – Daily

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.