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12.01.202613:01 Forex Analysis & Reviews: AUD/JPY. Analysis and Forecast

Relevancia 05:00 UTC--5

Exchange Rates 12.01.2026 analysis

The AUD/JPY pair has maintained a confident upward momentum for the second consecutive day and, at the start of the European session on Monday, is rising toward the round 106.00 level, reaching a new high since July 2024. The current news and fundamental backdrop generally supports the bullish scenario and indicates that the path of least resistance for the pair is to the upside.

The Japanese yen remains under pressure amid uncertainty regarding the timing of the next interest rate hike by the Bank of Japan and rising tensions in relations between Tokyo and Beijing. Last week, China deepened its dispute with Japan by imposing restrictions on the export of dual-use goods, including a number of rare earth elements. This increases risks to supply chains for Japanese manufacturers and puts additional pressure on the yen, thereby supporting further gains in AUD/JPY.

Another source of uncertainty is Japan's domestic political backdrop. According to Yomiuri, Prime Minister Sanae Takaichi is considering the possibility of holding early parliamentary elections in the first half of February. This increases political risks and strengthens expectations of further yen depreciation in the near term.

In contrast, the Australian dollar is receiving support from expectations of further monetary policy tightening by the Reserve Bank of Australia (RBA) in the foreseeable future. The RBA rate outlook provides an additional positive impulse for AUD/JPY and generally confirms a favorable short-term outlook for the pair. However, given cautious sentiment in global markets, investors may want to approach the opening of new long positions carefully.

At the same time, the prevailing geopolitical backdrop—including the US invasion of Venezuela, threats by US President Donald Trump to use military force in response to unrest in Iran, the White House's persistent push to acquire Greenland, as well as the ongoing Russia–Ukraine conflict—continues to support investor nervousness. Such a risk configuration could strengthen the Japanese yen's status as a safe-haven asset and simultaneously act as a restraining factor for the risk-sensitive Australian dollar, which in theory may limit the potential for further upside in AUD/JPY at the current stage.

From a technical perspective, the pair is trading above all major indicators and has reached the round 106.00 level, which has become an obstacle to further growth. Oscillators on the daily chart are positive, but the Relative Strength Index is close to overbought territory, suggesting the possibility of some consolidation or a corrective pullback.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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