The yen has recovered significantly in recent weeks against all other major currencies as the Bank of Japan continues to intervene in bond markets by amending its controls on yields. Expectations are generally holding that inflation will increase in Japan over the next few months, so with most other major central banks slowing down hiking or at least thinking about slowing down there seems to be scope fundamentally for the yen’s recovery to continue.
However, the Australian dollar has held fairly well against the yen relative to USDJPY or GBPJPY because AUD has been supported by generally high prices for industrial commodities and China’s reopening. The main intrigue at the moment is whether the Reserve Bank of Australia will deliver another hike at its next meeting on 7 February. Currently the cash rate is 3.1% with analysts mostly expecting another three steps this year to 3.85%.
Based on TA, it seems favourable that a range might be established over the next couple of weeks, since there have been strong reactions from recent tests of both ¥91 and ¥88. With the slow stochastic neutral, a strong movement this week to break the range is unlikely unless there’s a significant surprise from Thursday’s job data. In the medium term the bias would probably be to the upside considering the double bottom and the apparent strength of the 100 SMA on the weekly chart, but for now the 50-day SMA from Bands will probably remain an important area of resistance.
Although
AUDJPY was traditionally one of the prime candidates for carry traders before Covid, the RBA’s relative caution with hiking rates last year has meant that the fallout from the BoJ’s recent interventions has mainly affected USDJPY. That doesn’t mean the BoJ isn’t important for this symbol, just that the focus is probably more on Australian job data this week.
However, the Australian dollar has held fairly well against the yen relative to USDJPY or GBPJPY because AUD has been supported by generally high prices for industrial commodities and China’s reopening. The main intrigue at the moment is whether the Reserve Bank of Australia will deliver another hike at its next meeting on 7 February. Currently the cash rate is 3.1% with analysts mostly expecting another three steps this year to 3.85%.
Based on TA, it seems favourable that a range might be established over the next couple of weeks, since there have been strong reactions from recent tests of both ¥91 and ¥88. With the slow stochastic neutral, a strong movement this week to break the range is unlikely unless there’s a significant surprise from Thursday’s job data. In the medium term the bias would probably be to the upside considering the double bottom and the apparent strength of the 100 SMA on the weekly chart, but for now the 50-day SMA from Bands will probably remain an important area of resistance.
Although
AUDJPY was traditionally one of the prime candidates for carry traders before Covid, the RBA’s relative caution with hiking rates last year has meant that the fallout from the BoJ’s recent interventions has mainly affected USDJPY. That doesn’t mean the BoJ isn’t important for this symbol, just that the focus is probably more on Australian job data this week.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.