Both the AUD/JPY and EUR/JPY currency crosses are trading in positive territory on Monday, but technical analysis from both sources indicates a persistent bearish outlook for each pair. The AUD/JPY cross recovered above 110.50, trading around 110.85 and snapping a four-day losing streak during the early European session. Despite this rebound, the technical outlook remains bearish, with the spot holding below the 100-day simple moving average (SMA) and the Relative Strength Index (RSI) at 41.58, signaling weak downside momentum. Resistance levels are noted at 111.45, 112.22, and 112.80, with a decisive break above these potentially paving the way for further gains [1].
Fundamental drivers for AUD/JPY include sticky inflation in Australia, which underpins a hawkish outlook for the Reserve Bank of Australia (RBA). The RBA is anticipated to hike the Official Cash Rate (OCR) from 4.35% to 4.60% at its meeting on Tuesday, marking the fourth increase in 2026 and the highest rate since 2011. ING economists expect a decisive 25bp rate hike, citing tight labor market conditions, upside surprises in GDP growth, and stronger-than-expected inflation readings. The August Consumer Price Index (CPI) inflation data, due Wednesday, is expected to show a rise of 4.1%. Any signs of hotter inflation could lift the Aussie against the Yen in the near term [1].
For EUR/JPY, the cross trades around 179.70 during Asian hours, retaining a bearish bias as it remains below both the nine-day and 50-day Exponential Moving Averages (EMAs). The 14-day RSI at 41.43 suggests weak but stabilizing momentum. The pair may navigate support at 177.00 and the 11-month low of 175.70, while resistance is seen at the nine-day EMA (177.88), 50-day EMA (182.17), and the upper boundary of the descending channel at 184.60, with the all-time high at 187.95 set on April 17 [2].
Both articles highlight the impact of recent comments from Japanese officials. Japan's Prime Minister Takaichi Sanae and Finance Minister Katayama Satsuki have expressed concerns about the Yen's weakness, with Katayama reconfirming its undervaluation as problematic after discussions with US Treasury Secretary Scott Bessent. Scotiabank strategists note that the Yen is leading G10 gains against the US Dollar, attributing this to verbal intervention and FX comments from Japanese leadership, which have provided notable near-term support and driven an impressive move in the currency [1][2].
Market data shows the Euro was the strongest against the Japanese Yen today, with a percentage change of 0.04% [2]. However, the technical outlook for EUR/JPY remains bearish, and the AUD/JPY is also capped by technical resistance despite fundamental support from Australian inflation and RBA policy expectations.
CONCLUSION
Japanese officials' verbal intervention has provided near-term support for the Yen, impacting both AUD/JPY and EUR/JPY crosses. Despite positive trading sessions, technical analysis for both pairs remains bearish, with resistance levels capping upside moves. Upcoming RBA policy decisions and Australian inflation data could further influence AUD/JPY, while EUR/JPY faces continued downside risk.