The Australian dollar/yen pair is currently trading in the ¥109–114 range. While Australia's interest rates, inflation and robust employment are supporting the market, Japanese interest rates and intervention concerns are capping the upside, and the pair is expected to remain range-bound.
The Australian dollar/yen (AUD/JPY) pair is trading in the ¥112 range. Views point to upside resistance around the upper ¥114s and downside support around the upper ¥111s, with the pair continuing to search for direction within a ¥109–113 range. The Australian dollar is prone to buying pressure on the back of the interest-rate differential, while concerns over Japanese intervention are also limiting the upside.
On the Australian side, interest rates are widely expected to remain unchanged at 4.35%, while inflation is expected to remain on an upward trend. Employment increased as of June, and the unemployment rate remained low at 4.4%. These factors are viewed as supportive of the Australian dollar.
On the Japanese side, the Bank of Japan's policy rate is set at around 1.0%, and conditions are said to be conducive to yen buying. The Ministry of Finance's foreign-exchange intervention from April to June was reported to total ¥11.7349 trillion, and such intervention is seen as potentially supporting yen appreciation.
China's economic conditions and resource prices also affect the Australian dollar/yen pair. China's PMI was 49.2 and has been trending lower, while iron ore prices have fallen from their highs and continue to face resistance on the upside. These factors could restrain gains in the Australian dollar.