10.04.202613:20 Forex Analysis & Reviews: AUD/JPY Forecast: Geopolitical Tensions in the Strait of Hormuz Put Pressure on the Japanese Yen

The AUD/JPY pair has entered a phase of bullish consolidation and has shown little reaction to mixed inflation data from China. At the moment, the pair is trading near the psychological level of 113.00—its highest level since March 18—with potential for further growth.

China's National Bureau of Statistics reported that the headline Consumer Price Index (CPI) rose by 0.9% year-over-year in March. This marked a slowdown from 1.3% in February and came in below the expected 1.2%. On a monthly basis, the index declined by 0.7%, compared to analysts' expectations of a 0.2% drop and a 1% increase in the previous month. These figures did not significantly impact the market and had little effect on the Australian dollar or the AUD/JPY pair overall.

In contrast, the Japanese yen is showing relative weakness, driven by concerns about potential economic disruptions in Japan due to shipping interruptions through the Strait of Hormuz. Iran has once again blocked traffic through this strategically important waterway in response to intensified Israeli strikes on Lebanon. Additionally, U.S. President Donald Trump warned of possible strikes if Iranian nuclear agreements collapse, highlighting the ongoing risk of further escalation.

These factors are supporting the positive momentum in AUD/JPY, as the United States and Iran continue preparations for ceasefire negotiations. Overall, the situation remains tense, and further volatility in currency markets can be expected in the near term due to geopolitical risks.

From a technical perspective, oscillators remain in positive territory, and the pair is trading above key moving averages, indicating potential for continued growth.