Audjpy Trades On Fears Of Fx Intervention

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Audjpy Trades On Fears Of Fx Intervention

Aud/Jpy Trades At 104.50 On Fears Of Fx Intervention

AUD/JPY has lost some of its recent gains under the assumption that the Japanese authorities will step in to support the Japanese Yen.

As a result, the JPY is now showing strength against the AUD as Monday's session unfolds. However, the key catalyst is the fear of a possible intervention by the Japanese authorities.

No Comments On Fx Intervention - Boj Officials

According to media reports, the senior currency official of Japan decided not to comment when asked whether they have intervened in the FX market. It is important to note that the Japanese markets are closed today due to the 'Showa day.'

Despite the short-term selling in the AUD/JPY, the JPY is still weak due to various reasons, such as an uncertain BOJ rate outlook, slowing inflation, and an uplift of the market sentiment. All of these factors have worked in tandem to lower or even end the JPY's safe-haven appeal.

Another thing that works in the favor of a bullish AUD/JPY is the interest rate difference between Australia and Japan, which is still pretty big.

For now, the AUD/JPY is seen near 104.50 and has just closed outside of an ascending channel. At the same time, the RSI is printing above 50, which also supports a bullish AUD/JPY. If we look at the above, the most probable resistance can be seen at 105.00, which means the pair still has 50 or more pips of no hurdle.

If the AUD/JPY bulls manage to break the 105.00 handle, the next resistance level to look out for will be 105.43, which is also the high from April 2013.

So when we say that the AUD/JPY is at historic highs or even the highest point in almost a decade, the fears of FX intervention become all too real. There's no denying that JPY has become very weak against the AUD and USD, which is enough of a reason for the BoJ to step in and do something about it.

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