AUD/JPY is trading in negative territory around 110.35 in the early European session on Monday, with the Japanese yen outperforming the Australian dollar and the pair staying under bearish pressure below its 100-day simple moving average. The latest move reflects growing support for the yen after hawkish Bank of Japan language reinforced expectations that the central bank could raise interest rates later this year.
What happened to AUD/JPY?
The AUD/JPY cross has slipped below 110.50 and is holding near 110.35, according to the source story. That leaves the pair weaker on the day and keeps it in a technically vulnerable position as long as it remains under the 100-day SMA.
For traders, that combination matters because price action and policy expectations are pointing in the same direction. The yen is drawing demand, while the Australian dollar is losing ground against it.
Why is the Japanese yen strengthening?
The main driver in the source is hawkish language tied to the Bank of Japan. That kind of messaging matters because it can shift market expectations toward tighter policy, including the possibility that the BoJ will raise interest rates this year.
When traders start to believe a central bank may tighten policy sooner rather than later, the currency often gains support. That appears to be what is happening here, with the yen firming enough to push AUD/JPY lower in Monday’s early trading.
What traders are watching
- Spot price: AUD/JPY is trading around 110.35.
- Immediate threshold: The pair has dropped below 110.50.
- Technical backdrop: The source says bearish bias persists below the 100-day SMA.
- Policy catalyst: Hawkish BoJ language is supporting expectations of a rate hike this year.
Why does the 100-day SMA matter?
The 100-day simple moving average is a widely watched trend marker. When a pair trades below it, many market participants read that as a sign that sellers still have the upper hand.
In this case, the source explicitly says the bearish bias persists below the 100-day SMA. That means any rebound in AUD/JPY may face resistance unless the pair can recover and hold above that level.
What does this mean for Forex traders?
For short-term traders, the current setup suggests that the yen remains the stronger side of the cross for now. AUD/JPY is not just drifting lower; it is doing so while the broader technical tone remains negative.
That makes the pair especially sensitive to changes in BoJ expectations. If markets continue to price in a higher chance of a rate increase this year, the yen could keep its advantage. If those expectations fade, AUD/JPY may find room to stabilize.
What is next for AUD/JPY?
Based on the source, the next key question is whether the pair can reclaim lost ground above 110.50 and, more importantly, move back above the 100-day SMA. Until that happens, the market is likely to treat rallies cautiously.
As of Monday’s early European session, the message from price action is straightforward: the yen is in control, and AUD/JPY remains under bearish pressure.
Risk disclaimer: Forex trading involves risk, and prices can move quickly in response to policy expectations and market sentiment.
