AUD/JPY Price Forecast: Recovers from six-month low, but retains bearish bias below 100-day SMA

- AUD/JPY rebounds from six-month low to near 109.95 in Thursday’s early European session.
- The negative tone of the cross prevails below the 100-day SMA, with bearish RSI momentum.
- The initial support level to watch is 109.30; the first upside barrier emerges at 110.90.
The AUD/JPY cross trades in positive territory around 109.95 during the early European session on Thursday. The Japanese Yen (JPY) softens against the Australian Dollar (AUD) as a mixed picture of the Japanese economy may soften the chance of a back-to-back rate hike from the Bank of Japan (BoJ) this month.
Japanese manufacturers’ confidence hit an eight-year high in the third quarter (Q3), but non-manufacturers’ mood soured, the Tankan survey showed on Thursday. The Tankan Large Manufacturing Index rose to 24 in Q3 from 22 in Q2 but was weaker than the market expectation of 25. Meanwhile, Japan’s Tankan Non-Manufacturing Index declined to 35 in Q3, compared to 37 in Q2, below the market consensus of 36.
According to a summary of opinions at its BoJ September meeting, some policymakers saw the need to accelerate the pace of interest rate rises or bring them closer to the central bank’s target soon. Most of the opinions cited the need to follow September’s rate hike with further increases in borrowing costs as inflationary pressure mounts.
Yen support builds as markets price faster BoJ hiking cycle
Analysts at MUFG highlight that the Yen is “deriving more support from building expectations for faster BoJ rate hikes,” with market participants now looking for a more assertive policy path. They note that “market participants now expect the BoJ to deliver 3-4 more hikes in the year ahead,” underscoring how quickly the anticipated tightening cycle has steepened. Even so, MUFG points out that former BoJ official Kazuo Momma “believes the ‘basic pace will probably be once every three months’,” a trajectory the bank says is “in line with our own forecast for another hike before the end of this year at the December policy meeting.”
Technical Analysis: AUD/JPY keeps a bearish vibe below the 100-day SMA
In the daily chart, AUD/JPY keeps a bearish near-term bias as spot holds beneath the 20-day Bollinger Bands simple moving average center and faces additional overhead supply at the upper band and the 100-day simple moving average. The latest 14-day Relative Strength Index at 37.33 hovers just above oversold territory, hinting that while downside momentum is still present, selling pressure may be losing intensity as the cross consolidates near recent lows.
On the downside, initial support is aligned with the 20-day Bollinger Bands lower boundary at 109.30, which acts as the immediate floor for any extension of the decline. Further south, the next contention is seen at the September 30 low of 108.89, followed by the February 13 low of 107.69.
On the topside, a recovery attempt would first need to clear the Bollinger center line at 110.90. Any follow-through buying above the mentioned level, the upper band at 112.50 and the 100-day SMA around 112.65 form a dense resistance cluster that is likely to cap rebounds unless buyers can decisively reclaim this area.





