AUD\/JPY traded near 109.00 as Australian and Japanese policy paths diverged. Australia\u2019s January unemployment rate held at 4.1% versus 4.2% expected, while job gains were 17.8K against a 20K consensus.<\/p>\n
The RBA lifted the cash rate 25 basis points to 3.85% earlier this month, its first increase in over two years. The minutes kept a data-dependent stance and pointed to inflation rising through the second half of 2025.<\/p>\n
The BoJ kept its policy rate at 0.75% in January. Markets price about an 80% chance of a BoJ hike by April, and US Q4 GDP and core PCE are due on Friday.<\/p>\n
Technically, the pair stayed above the 50-day EMA at 106.60 and the 200-day EMA at 100.45 after rising from around 104.72 in early January. It peaked at 110.79 in early February and has moved between about 109.00 and 110.00 for two weeks, with support near 108.00 and a possible move towards 112.00 if 110.79 breaks.<\/p>\n
AUD drivers include interest rates, iron ore, China, inflation, growth, trade balance, and risk appetite. Iron ore exports were $118 billion a year based on 2021 data.<\/p>\n
The key driver for the Australian dollar against the yen is the widening gap between central bank policies. We see the Reserve Bank of Australia (RBA) maintaining a hawkish stance, a direct response to the inflation surge we witnessed in the second half of 2025. This policy difference makes holding the higher-yielding Australian dollar more attractive than the Japanese yen.<\/p>\n
This hawkish RBA view is supported by a strong domestic economy, particularly the tight labor market. Looking at recent data, Australia’s unemployment rate is holding firm at 4.1%, reinforcing expectations that the RBA may need to hike rates again. Meanwhile, strong prices for iron ore, Australia’s main export, provide another layer of fundamental support for the currency.<\/p>\n
On the other side, the Bank of Japan (BoJ) is moving much more slowly toward policy normalization. While markets are pricing in a high chance of a rate hike by April, the gradual pace means the interest rate difference with Australia will likely remain wide for some time. We are watching for sustained wage growth in Japan, which would be the final trigger for the BoJ to act more decisively.<\/p>\n
The health of the Chinese economy remains a crucial factor for the Australian dollar. Recent data has been encouraging, with China’s latest manufacturing PMI figures from January showing a modest expansion. This stabilization in Australia’s largest trading partner helps underpin demand for Australian exports and supports a positive outlook for the AUD.<\/p>\n
From a trading perspective, with the AUD\/JPY pair consolidating near 109.00, this could be an opportunity to use options. Selling put spreads or cash-secured puts with strike prices below the current support level of 108.00 allows us to collect premium while betting that the fundamental story will prevent a significant drop. This strategy profits from both a sideways move or a continued grind higher in the coming weeks.<\/p>\n
We must also watch for external shocks that could change broader market sentiment. Key inflation data from the United States, like the upcoming core PCE report, could trigger a “risk-off” event. Such a shift would increase demand for the safe-haven yen, creating a headwind for the AUD\/JPY pair regardless of its own strong fundamentals.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/JPY hovers near 109.00 as RBA hikes contrast BoJ outlook; unemployment steady; key resistance 110.79.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42354"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42354\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}