AUD\/JPY slipped to about 113.95 in early European trading on Tuesday. The Japanese Yen strengthened against the Australian Dollar as markets became more cautious ahead of possible US-Iran peace talks.<\/p>\n
Bloomberg reported that US Vice President JD Vance will travel to Pakistan later on Monday to resume negotiations, either Tuesday night or Wednesday morning. He is expected to be joined by Jared Kushner and special envoy Steve Witkoff.<\/p>\n
Talks remained uncertain after US President Donald Trump said on Tuesday that he is not likely to extend the two-week ceasefire with Iran. This increased the pressure on negotiators to reach an agreement to end the war.<\/p>\n
Markets are watching Middle East events and any progress in US-Iran negotiations. A longer conflict could support the Yen as a safe-haven currency and weigh on AUD\/JPY.<\/p>\n
On the daily chart, price remains above the 20-day Bollinger simple moving average and the 100-day exponential moving average (EMA). The Relative Strength Index (14) is 67.56, just below overbought levels, while the upper Bollinger band caps the upside.<\/p>\n
Support is seen near the Bollinger middle band at about 111.75, then around the 100-day EMA at 108.51 and the lower Bollinger band at 108.41. Resistance is near the upper band at 115.10.<\/p>\n
Looking back at the situation in 2025, we saw the AUD\/JPY cross facing uncertainty from potential US-Iran peace talks. The Japanese Yen was poised to strengthen on any signs of prolonged conflict. The key technical levels we were watching were the 108.51 EMA for support and the 115.10 level for a bullish breakout.<\/p>\n
Those talks ultimately led to a fragile de-escalation, which temporarily reduced the Yen’s safe-haven appeal and caused carry traders to pile back in. This propelled the pair well through the 115.10 resistance level, eventually topping out near 118.50 late last year. The bullish sentiment we saw forming in 2025 did indeed play out for several months.<\/p>\n
Today, the main driver has shifted from that specific geopolitical risk to the vast interest rate gap between the two nations. The Reserve Bank of Australia has kept rates firm at 4.5% to combat inflation, which is still running at 3.8%. This contrasts sharply with the Bank of Japan, which only recently moved its policy rate to a mere 0.1% in January.<\/p>\n
This wide interest rate differential of over 400 basis points makes holding long AUD\/JPY positions attractive for the positive carry. Traders should consider using options, like buying calls or selling puts, to capitalize on this while managing downside risk if geopolitical tensions resurface. The stability of iron ore prices around $110 per tonne provides a fundamental support for the Aussie dollar.<\/p>\n","protected":false},"excerpt":{"rendered":"
AUD\/JPY dips to 113.95 as yen strengthens on caution ahead of potential US-Iran peace talks.<\/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-45458","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\/45458","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=45458"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45458\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}