AUD/JPY Forecast
AUD/JPY News and Analysis
It's worth noting that the Japanese yen's rise corresponded with the Bank of Japan signaling that it might act.
The AUD/JPY initially attempted to rebound during the early Thursday trade but encountered significant noise and support near the 91 levels.
This is a region that has previously been significant, therefore it will most probably have a lot of market memory associated with it.
It was previously supported, therefore it should now be fought, and I believe many people will be looking at this through the lens of whether or not the level will stay critical.
It's also worth noticing that the 50-Day EMA is approaching the 200-Day EMA, making the so-called death cross. Of course, the death cross is a pretty unfavorable long-term sign, so it will be fascinating to watch how this plays out.
After all, the Japanese yen might be one of the most fascinating currencies to trade in 2023, given how much it was sold off over the previous year. Remember that the Bank of Japan has declared that it would maintain yield curve regulations, with the 10-year note having a 50 basis point maximum.
It's worth noting that the Japanese yen's rise corresponded with the Bank of Japan signaling that it might act. However, the 10-year Japanese Government Bond rate is just 41 basis points higher overnight, so there is still some wriggle space. If the market threatens the 50 basis point threshold in the 10-year yield, the Japanese yen will likely continue to fall as the central bank is obliged to print more bravery for you to purchase more debt.
It's also worth mentioning that the Wednesday candlestick was rather harsh, with significant purchasing against the Japanese yen seen not just in the Australian dollar but also in the majority of other currencies. In other words, we may have recently witnessed the market's "bottom," as we created a double bottom at the ¥88 level. We are not yet out of the woods, but if we can significantly break above the 91 levels, potentially on a daily or even weekly close, I believe this market will begin to go to the outside. Otherwise, it might be swinging around between ¥91 and ¥88.