AUD\/JPY traded near 111.80 in Wednesday\u2019s Asian session, keeping a positive tone while holding above the 100-day EMA near 107.50. The outlook is supported by RSI in the high-50s, with initial support at 111.00 and an upside barrier around 112.50.<\/p>\n
The move came as the Australian Dollar rose against the Yen amid improved risk sentiment after Donald Trump said he agreed to suspend bombing and attacks on Iran for two weeks, if Iran reopens the Strait of Hormuz. Iran\u2019s Foreign Minister Seyed Abbas Araghchi said safe passage through the strait \u201cwill be possible\u201d during the two weeks via coordination with Iran\u2019s Armed Forces, subject to technical limits.<\/p>\n
Reduced demand for safe-haven assets weighed on the Yen, although concerns about potential Japanese intervention may limit Yen weakness. Japan\u2019s top currency diplomat Atsushi Mimura said officials may take \u201cdecisive\u201d steps if speculative moves persist.<\/p>\n
Technically, price remains in the upper half of the Bollinger Bands, which are still wide. A break below 111.00 could open 110.00, then 109.00 near the lower band area, while resistance is at 112.61 and 113.15.<\/p>\n
The Yen\u2019s direction is shaped by Japan\u2019s economy, Bank of Japan policy, Japan\u2013US yield spreads, and risk sentiment. The BoJ\u2019s ultra-loose policy from 2013 to 2024 weakened the Yen, with a 2024 shift away from it narrowing the 10-year yield gap.<\/p>\n
Given the temporary de-escalation in the Middle East, we see a short-term window for further AUD\/JPY strength. The two-week truce period weakens the safe-haven Japanese Yen, favouring the risk-sensitive Australian Dollar. This environment supports the current upward momentum towards the 112.50 resistance level.<\/p>\n
However, we must approach this with caution, as the move is based on a fragile geopolitical agreement. Buying short-dated call options with a strike around 112.50 and an expiry in late April or early May allows for participation in the upside while strictly defining our maximum loss. Implied volatility on one-month options has ticked up to 12.8%, reflecting this very uncertainty, making defined-risk strategies prudent.<\/p>\n
The threat of intervention from Japanese authorities to support the Yen is capping the rally. We remember the Ministry of Finance’s decisive action in late 2022 when USD\/JPY crossed 150, showing their willingness to act against rapid currency weakness. Japan’s latest national CPI data for March 2026, which came in at 2.4%, also continues to support the Bank of Japan’s gradual policy normalization, providing a longer-term headwind for this cross.<\/p>\n
On the other side, recent trade balance figures from Australia showed a narrower-than-expected surplus, partly due to a slight easing in iron ore prices over the last quarter. This suggests the Australian dollar’s rally may not have the fundamental power to push significantly beyond the 113.50 level without fresh catalysts. This reinforces the view that the cross is facing strong resistance ahead.<\/p>\n
With these conflicting forces, we can consider strategies that benefit from elevated volatility and a potential range. Selling a bear call spread with the short strike above 113.00 could be an effective way to bet that intervention fears and moderating Australian data will cap the rally. This strategy takes advantage of the current optimism to collect premium, while still being protected from an unexpected surge higher.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/JPY holds 111.80, supported by bullish RSI; risk-on Trump-Iran pause weighs on yen, eyes 112.50.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44383","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44383"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44383\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}