At the beginning of 2025, the AUD/JPY currency pair has shown a strong upward trend, firmly establishing itself above the key psychological level of 111.00, marking the end of the technical consolidation phase since last year. This currency pair reflects the exchange rate dynamics between the Australian dollar and the Japanese yen, recently becoming a focal point for traders observing the divergence in Asian monetary policies. As economic data from both countries is released, market sentiment is further leaning towards the bulls.
From a technical perspective, AUD/JPY has built a solid support base around 110.50 and has maintained its position above the 50-day and 200-day moving averages for several weeks, confirming a bullish structure in the medium term. By the end of 2024, the price successfully broke out and closed above an ascending triangle, a classic pattern that typically indicates a buildup before a trend continuation. The Relative Strength Index (RSI) remains in the range of 55 to 65, indicating robust upward momentum without being overextended; the MACD histogram also continues to stay above the zero line and is expanding, suggesting that bullish strength is increasing.
The current key resistance level is at 111.50, and if it can effectively break through 111.80, the next target may point towards 112.50, which is the high range since the third quarter of 2024. Conversely, 110.20, previously a resistance level, has turned into support and has become a dividing line for bulls and bears. Trading volume data shows that the recent rise has been accompanied by a significant increase in volume, validating the effectiveness of the breakout.
On the fundamental side, the Reserve Bank of Australia (RBA) continues to maintain a relatively tight policy stance, while the Bank of Japan (BOJ) still upholds an ultra-loose interest rate environment, with the interest rate differential continuing to widen, providing intrinsic support for the Australian dollar. Meanwhile, the moderate recovery of the Chinese economy has driven demand for Australian commodities such as iron ore and coal, indirectly boosting the export outlook for the Australian dollar. Against the backdrop of gradually warming global risk appetite, the Australian dollar, as a typical commodity currency, is more attractive compared to the Japanese yen, which has stronger safe-haven properties.