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>>AUD/JPY Stays Above 110.00, Defying Expectations After Australia's Crucial CPI Release

AUD/JPY Stays Above 110.00, Defying Expectations After Australia's Crucial CPI Release

crypthub

about 5 hours ago

Market Overview

AUD/JPY remains firmly above the 110.00 psychological barrier after Australia’s latest CPI release. The pair’s resilience reflects shifting inflation dynamics and a widening monetary‑policy gap with Japan. Traders view the level as a key barometer for Asia‑Pacific sentiment heading into 2025.

Fundamental Drivers

The CPI print, hotter than expected, fuels expectations of a more hawkish RBA, supporting the Aussie dollar. Japan’s Bank maintains ultra‑accommodative policy, keeping JGB yields near zero and widening the yield spread. This divergence sustains the carry trade, where investors borrow yen to buy higher‑yielding AUD assets.

Technical Outlook

Technically, holding above 110.00 provides both support and a launchpad toward resistance near 112.50. Analysts watch the RSI, 50‑day and 200‑day moving averages, and volume for signs of overbought pressure. Any Japanese‑government intervention rhetoric could prompt short‑term volatility.

Regional Impact and Outlook

A stronger AUD/JPY raises import costs for Japan and can dampen Australian export competitiveness, while also signalling robust capital inflows into the region. Market participants will track Australian employment, retail sales and Chinese growth data, alongside Japanese CPI, GDP and BoJ commentary. The pair’s trajectory will continue to mirror policy differentials and global risk appetite.