The Australian dollar edged higher against the Japanese yen on Monday, extending a modest rebound despite lingering signs of technical weakness in the broader trend. The mild recovery reflects improving sentiment in risk assets, though momentum remains fragile amid mixed signals from central banks and global growth concerns.
AUD/JPY traded around 99.20, holding onto last week’s gains after bouncing off support near the 98.50 level. The pair’s recovery coincides with a brighter tone in equity markets and firmer commodity prices, which typically support the Aussie. However, analysts caution that bearish technical indicators still point to a potential reversal unless the pair breaks convincingly above key resistance levels.
AUD/JPY 1-D Chart as of April 14th, 2025 (Source: TradingView)
Much of the pair’s strength is being driven by renewed risk appetite as fears of aggressive monetary tightening ease. With the Federal Reserve signaling patience and global bond yields stabilizing, traders have begun rotating back into growth-sensitive assets, including the Australian dollar.
Still, the broader technical backdrop remains cautious, with moving averages and trendlines suggesting underlying weakness. The yen, traditionally a safe haven, has also seen intermittent support due to geopolitical uncertainty and demand from cautious investors looking to hedge broader macro risks.
Diverging policy expectations between the Reserve Bank of Australia and the Bank of Japan continue to influence the pair. While the RBA remains on hold amid sticky inflation, the BOJ’s gradual shift away from ultra-loose policy has lent the yen some strength in recent sessions, capping AUD/JPY’s upside.
Traders will be watching for economic data out of China and Japan this week, as well as commentary from RBA officials, for clues on the pair’s next move. For now, the Aussie’s rebound looks more like a short-term correction than a trend reversal, as the technical setup continues to favor the bears.
