The Japanese Yen (JPY) experienced renewed pressure against both the Australian Dollar (AUD) and the Euro (EUR) in early Monday trading, as central bank actions and intervention concerns shaped currency market dynamics. The AUD/JPY cross posted modest gains near 113.60, buoyed by a hawkish stance from the Reserve Bank of Australia (RBA), which recently raised its Official Cash Rate (OCR) to 4.35%. This marks the third consecutive rate hike this year, with the RBA signaling further tightening ahead and projecting a policy rate of 4.70% by the end of 2026, with no cuts expected until 2028 [1]. The RBA cited elevated inflation, particularly in the second half of 2025, and rising fuel and commodity prices due to Middle East conflict as key factors behind its policy path [1].
Despite the AUD's strength, traders remain cautious due to the potential for further intervention by Japanese authorities. Japanese officials reportedly intervened in the currency market again during the Golden Week, with market estimates placing the cost of these moves at approximately ¥4 trillion to ¥5 trillion ($32 billion). Japan’s top foreign exchange official, Atsushi Mimura, indicated that continued intervention was possible [1].
Meanwhile, the EUR/JPY cross extended its winning streak for a third consecutive day, trading around 184.80 during Asian hours. Technical analysis showed the pair consolidating in a neutral tone, with the 14-day Relative Strength Index (RSI) near 47, suggesting momentum has cooled. The EUR/JPY is testing resistance at the 50-day Exponential Moving Average (EMA) of 184.86, with a potential move toward the all-time high of 187.95 recorded on April 17 if bullish momentum persists. Conversely, a break below the nine-day EMA at 184.75 could trigger a bearish move toward recent lows [2].
Currency heat maps indicate that the Euro was down 0.18% against the Yen on the day, while the Yen also showed weakness against other major currencies, reflecting a broader trend of JPY softness amid ongoing policy divergence and intervention uncertainty [2].
CONCLUSION
The Japanese Yen remains under pressure as the RBA's hawkish policy stance supports the AUD, while intervention concerns limit further downside for the JPY. Technical signals for EUR/JPY suggest a market in consolidation, with potential for both upward and downward moves. Overall, the market is cautious, balancing central bank actions with the risk of further Japanese intervention.