News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
AUD/JPY Jumps 1.5% as Yen Slides After BoJ Rate Increase
Traders' Opinions
Summary:
AUD/JPY surges 1.54% toward 112.60 despite the BoJ raising rates to 1.25%. The Yen weakened as the BoJ failed to signal faster tightening, while expectations for another RBA hike continue to support the Aussie.
Buy
TradingAUDJPY
EXP
112.418
Entry Price
114.800
TP
111.000
SL
111.913 -0.047 -0.04%
0
Point
Flat
111.000
SL
CLOSING
112.418
Entry Price
114.800
TP
AUD/JPY rallied sharply on Friday, climbing around 1.54% to 112.60 as the Japanese Yen weakened despite the Bank of Japan delivering its widely expected interest-rate increase. The Australian Dollar is benefiting from the contrasting market reaction to the policy outlooks in Japan and Australia.
The BoJ raised its policy rate by 25 basis points to 1.25% from 1.00%, taking borrowing costs to their highest level since 1995. The decision was approved by a 7-2 vote, with Toichiro Asada and Ayano Sato opposing the increase.
Rather than strengthening, however, the Yen came under heavy selling pressure. With the rate increase already largely reflected in market pricing, investors focused on whether the BoJ provided enough evidence to justify expectations for a faster tightening cycle. The accompanying communication appears to have fallen short of those expectations, triggering a classic sell-the-fact reaction in the JPY.
The BoJ continues to acknowledge several risks to the economic outlook, including the Middle East conflict, AI-related demand and volatility across currency markets. Policymakers also recognize the possibility that underlying inflation could eventually move above the central bank's 2% target.
Governor Kazuo Ueda maintained that additional rate increases remain possible if economic activity and inflation develop in line with the BoJ's expectations. However, the absence of a clearer signal regarding the timing or speed of future tightening has limited support for the Yen.
Japan's latest inflation figures reinforce the case for a gradual approach. National CPI was unchanged in August, while underlying inflation remained below the BoJ's 2% target. That reduces the immediate pressure on policymakers to accelerate the tightening cycle.
Australia presents a contrasting picture. The Reserve Bank of Australia continues to hold its policy rate at 4.35% after three increases earlier this year, but markets remain positioned for another hike to 4.60% at the next meeting.
RBA Governor Michele Bullock continues to warn that inflation remains elevated, with Middle East tensions increasing the risk of renewed price pressures. Deputy Governor Andrew Hauser has also indicated that additional tightening could be necessary to return inflation sustainably toward target.
For AUD/JPY, the key driver is therefore not simply that Japan raised rates, but the relative expectations surrounding what comes next. The BoJ hike was already priced in and failed to deliver a sufficiently aggressive forward signal, while Australian inflation risks continue to support expectations of another RBA increase. That divergence has allowed AUD/JPY to accelerate toward the 112.60 region.
Technical Analysis
AUD/JPY has staged a powerful recovery on the 4-hour chart, surging from the 109.80–110.00 demand zone to trade around 112.47. The strength of the rebound has shifted short-term momentum firmly toward buyers and erased a significant portion of the decline seen earlier in September.
The 109.80–110.00 region has once again proved to be an important structural floor. Price rejected this area aggressively before establishing higher lows and accelerating through 111.00. The latest bullish impulse has now carried AUD/JPY directly into the 112.10–112.40 zone, an area that previously acted as both support and resistance.
After such a sharp advance, some consolidation or a brief corrective pullback around 112.20 would not be surprising. The key will be whether buyers can convert the recently reclaimed zone into support. Holding above roughly 112.00–112.20 would reinforce the breakout and provide a stronger foundation for continuation.
A sustained move through 112.50–112.80 would further strengthen the bullish structure and leave considerably more room to the upside. The next major objective visible on the chart sits around 114.75–115.05, where previous advances in July and August encountered significant selling pressure.
The projected path therefore favors a small correction followed by another bullish leg, rather than an immediate reversal of Friday's rally. A successful retest of the breakout area could provide the confirmation needed for buyers to target the upper resistance zone.
The bullish scenario would begin to weaken if price falls decisively back beneath 111.80. A deeper breakdown would raise the possibility that the latest surge was a false breakout and could expose 110.80 before the major 109.80 demand region returns to focus.
Overall, AUD/JPY has made a significant technical shift. Holding above the reclaimed 112.00–112.20 region keeps the recovery intact, with 114.80–115.00 representing the primary upside target.
TRADE RECOMMENDATION
BUY AUD/JPY
ENTRY PRICE: 112.42
STOP LOSS: 111.00
TAKE PROFIT: 114.80
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2026 FastBull Ltd
Home News Columns 7x24 Economic Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.