The Japanese Yen (JPY) has shown signs of strengthening against major currencies, with particular focus on the AUD/JPY and EUR/JPY crosses. In the early European trading hours on Tuesday, AUD/JPY traded in negative territory around 112.20, softening below the 112.50 level. This move comes as Japanese officials, including Finance Minister Satsuki Katayama and Chief Cabinet Secretary Minoru Kihara, reiterated their readiness to intervene in currency markets to counter excessive moves and emphasized efforts to build an economy less vulnerable to foreign-exchange volatility [1].
Despite the Yen's strength, the Reserve Bank of Australia's (RBA) hawkish tone, as reflected in the June meeting minutes, may help limit further losses for the Australian Dollar. The RBA indicated that monetary policy needs to remain restrictive to remove excess demand, with markets pricing in about 10 basis points of additional tightening by year-end and about 17 basis points of easing by 2027, according to Reuters [1]. Technically, AUD/JPY maintains a mildly bearish near-term tone, trading just under the 100-day Simple Moving Average (SMA) and the Bollinger Bands midline, with the Relative Strength Index (RSI) at 44, indicating soft but not extreme downside momentum. Key resistance levels are at 112.32 and 112.62, while support is seen at 111.25 [1].
In contrast, EUR/JPY has maintained a constructive bullish bias after four consecutive days of gains, trading around 185.70 during the Asian session on Monday. The pair remains above the session Volume-Weighted Average Price (VWAP) at 185.29 and both the nine-period and 50-period Exponential Moving Averages (EMAs) near 184.95–184.99, suggesting ongoing dip-buying interest [2]. The 14-day RSI at 57.0 points to firm but not overextended upside momentum. Technical analysis indicates that EUR/JPY is positioned near the upper boundary of a symmetrical triangle at 186.00, with a potential breakout possibly supporting a test of the all-time high at 187.95, recorded on April 17 [2]. Initial support is clustered just below 185.50, with further downside levels at 183.50, 181.87, and 180.81 [2].
Currency performance data shows that the Euro was the strongest against the Australian Dollar on the day, while the Australian Dollar underperformed against most major currencies, including the Yen and the Euro [2].
CONCLUSION
The Japanese Yen's recent strength is attributed to heightened intervention warnings from Japanese authorities, pressuring AUD/JPY lower while EUR/JPY sustains a bullish technical outlook. The divergence in performance between AUD/JPY and EUR/JPY reflects differing central bank stances and technical setups. Market participants remain alert to further official action from Japan and potential policy shifts from the RBA.