11.03.202610:16 Forex Analysis & Reviews: AUD/JPY. Analysis and Forecast

The AUD/JPY pair has maintained positive momentum for the fourth consecutive day, reaching new all-time highs. Quotes have surpassed the round level of 113.00, gaining nearly 100% during the day and signaling readiness to continue steady growth.

The Australian dollar is outperforming most currencies thanks to expectations of an imminent interest rate hike by the Reserve Bank of Australia (RBA). On Tuesday, RBA Deputy Governor Andrew Hauser noted that the upcoming central bank meeting would involve a "real discussion" about the need to tighten monetary policy amid concerns that military conflicts could trigger a new wave of inflationary pressure. These comments became the main catalyst for the strengthening of the Australian currency against the yen.

In contrast, the Japanese yen is under pressure due to the declining likelihood of a near-term interest rate hike by the Bank of Japan. Rising global oil prices are increasing the risks of economic slowdown, creating the threat of stagflation for the country—one of the world's largest importers of energy resources. This situation complicates the Bank of Japan's task of normalizing monetary policy and weakens the yen's position, which further supports the AUD/JPY pair.

Nevertheless, the market is factoring in the possibility of a currency intervention by Japanese authorities, who may step in to prevent further weakening of the yen. This could limit the pair's potential for further gains. However, fundamental conditions remain in favor of the Australian dollar, and any possible corrections are likely to be short-term and viewed by market participants as buying opportunities.

Investors' attention is now focused on the Reserve Bank of Australia meeting scheduled for next Tuesday, the outcome of which could set a new direction for the movement of the AUD/JPY pair. According to currency performance this week, the Australian dollar has shown its strongest gains specifically against the Japanese yen. From a technical perspective, the pair may experience a correction since the Relative Strength Index has entered overbought territory. Nevertheless, oscillators remain positive and the pair is trading above all moving averages, which also confirms the overall positive global trend for AUD/JPY.