Insights 
VT 
The AUD/JPY experienced some selling pressure around 97.10 during Friday’s Asian session. While it maintains a positive outlook long term, potential declines cannot be ignored due to a bearish RSI. Key resistance is noted at 98.50, with initial support at 96.50.
Factors impacting the Japanese Yen have been ongoing US-China trade tensions and political shifts in Japan. Despite these, the daily chart shows AUD/JPY above the 100-day EMA, supported by bullish momentum. Nonetheless, the RSI suggests that downward movement may continue before potential appreciation.
Resistance And Support Levels
Resistance for AUD/JPY is first seen at 98.50 and later at 99.50, with the psychological level of 100.00 being the ultimate target. On the downside, support is crucial at 96.50, with further risk at 96.15. If breached, the AUD/JPY could find itself around the 95.00-94.90 range.
The Japanese Yen’s value is influenced by the Bank of Japan’s policy, bond yields, and global risk sentiment. The BoJ’s monetary policy historically led to Yen depreciation, but recent shifts have offered some support. Market stress typically bolsters the Yen as a safe-haven asset.
As of today, October 17, 2025, the AUD/JPY cross is trading near 97.10 with a long-term bullish bias but showing signs of short-term weakness. The bearish signal from the RSI indicator suggests we could see a further dip before the upward trend resumes. For derivative traders, this presents a complex but opportunity-rich environment.
The case for Australian dollar strength is supported by recent economic data, which helps offset some of the bearish sentiment. For example, Australia’s September inflation report came in at 3.1%, just above the forecast 2.9%, keeping the Reserve Bank of Australia on a hawkish footing. This policy stance should continue to provide underlying support for the AUD against the yen.
Japanese Political Uncertainty
On the Japanese side, political uncertainty following the LDP coalition’s collapse is a factor that could weaken the yen. However, recent comments from the Bank of Japan suggest they are still cautious about further policy normalization, especially with the latest Tankan survey showing a slight dip in business confidence. This cautiousness tempers expectations of a rapidly strengthening yen, creating a floor for the AUD/JPY cross.
Given the potential for a move higher, buying call options with a strike price above the 98.50 resistance level could be a way to position for a potential rally toward the 100.00 psychological mark. This strategy would allow traders to capitalize on the upside while defining their maximum risk to the premium paid.
However, we must respect the weak RSI and the risk of a drop towards the 96.50 support level, which aligns with the 100-day moving average. To manage this downside risk, purchasing put options with a strike near 96.00 could serve as a valuable hedge against this short-term downward momentum. This approach protects existing long positions or can be used as a speculative bet on a brief sell-off.
We saw a similar dynamic back in 2022-2023 when central bank policy divergence was a primary driver for yen weakness. That period teaches us that while the overall trend can be strong, sharp pullbacks driven by global risk-off sentiment are common and must be planned for.
