AUD/JPY Pair Maintains Bearish Bias Monday
The Australian Dollar trades at 110.35 as the Japanese Yen gains on expected policy shifts.
Updated on Oct. 26, 2026 in Economic Indicators
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On October 26, 2026, the AUD/JPY currency pair traded at 110.35 during the European session. The pair remains under pressure as the Japanese Yen strengthens amid speculation regarding future central bank interest rate hikes.
Why it matters
The Japanese Yen is gaining strength as markets price in potential monetary tightening by the Bank of Japan to address inflation. Meanwhile, Reserve Bank of Australia Chief Economist Sarah Hunter has noted that domestic interest rates may require upward adjustments.
The AUD/JPY pair is trading at 110.35, holding below the 100-day simple moving average of 112.05. The Relative Strength Index currently stands at 47.01, reflecting a bearish near-term bias for the pair.
The players
Sarah Hunter
She serves as the Chief Economist for the Reserve Bank of Australia and provides analysis on national interest rate requirements.
Bank of Japan
This is the central bank of Japan responsible for setting monetary policy, including interest rates and inflation targets.
The details
The pair faces immediate resistance at 111.10 and holds a downside support target at 110.15. Market participants are monitoring the Bank of Japan, which targets 2% inflation and currently holds a 2026 inflation projection of 2.5%.
Timeline
August 18, 2026: The AUD/JPY pair reached a high of 113.61.
October 15, 2026: The pair reached a low of 108.64.
October 26, 2026: The AUD/JPY pair traded at 110.35.
October 30, 2026: Bank of Japan policy meeting.
December 18, 2026: Expected date for potential Bank of Japan rate hike.
Macro View
This currency movement follows a pattern set by the Bank of Japan's 2% inflation target, which necessitates periodic adjustments to monetary policy. Current market dynamics reflect a departure from previous loose policy as the bank works toward its 2026 inflation projection of 2.5%.
The strengthening of the Japanese Yen relative to the Australian Dollar impacts the cost of international trade and imports for businesses operating between these economies. Investors should monitor central bank announcements as they directly influence interest rate expectations and capital allocation.
The takeaway
The AUD/JPY pair remains under downward pressure as central bank policy trajectories in Japan and Australia diverge. Traders often monitor the 100-day simple moving average and the Relative Strength Index to identify potential shifts in market momentum.
What happens next
The Bank of Japan is scheduled to hold a policy meeting on October 30, 2026, while markets are pricing in an 80% probability of a rate hike on December 18, 2026.
Further reading
For more information on market trends, visit Economic Indicators.
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