AUD/JPY remains bearish below the 100-day SMA at 109.30, with markets monitoring intervention risks and a record shift in Japanese household demand for government bonds.
The cross is trading around 109.30, below the 100-day SMA, with intervention warnings from Japan's top currency diplomat Atsushi Mimura arguing against further upside. However, BoJ board member Asada's mildly dovish comments cap the Yen and support the cross, while MUFG sees risks skewed to Yen strength only over the medium term. Bullish and bearish forces largely offset.
MUFG notes a meaningful shift in domestic demand for JGBs, with November issuance to individuals for 3, 5 and 10-year bonds totalling JPY 2,026bn, the largest single-month total. Growing household buying supports JGB prices, which pushes yields down, and the report links this flow shift to a more sustained turnaround in Yen weakness. Speculation about tax incentives (NISA inclusion, inheritance tax removal) could reinforce demand.
The AUD/JPY cross trades near 109.30, pressured by Japanese authorities' warnings against rapid currency moves and technical resistance below the 100-day SMA. While BoJ board member Toichiro Asada’s dovish remarks offer some support, MUFG analysts highlight a record JPY 2,026bn in household JGB issuance as a signal of potential medium-term Yen strength.
The cross trades around 109.30 amid warnings from Japanese authorities about excessively rapid currency moves and intervention risk, and it sits below its 100-day moving average, keeping a bearish near-term bias.
Resistance lies near 110.25 and then 110.70-110.75, with the August 18 high of 113.61 beyond that. Support is at the Bollinger lower band around 108.65, then the November 6 low of 108.24 and the February 13 low of 107.70.
Household demand is growing, with November issuance of 3, 5 and 10-year JGBs to individuals totalling JPY 2,026bn, the largest single-month total, helped by BoJ credibility and speculation of tax incentives for individual holders.