The AUD/JPY faced some selling pressure around 97.10 during Friday’s Asian session. While the long-term outlook remains positive, it’s important to consider possible declines due to a bearish RSI. Key resistance is at 98.50, with initial support at 96.50. Several factors are influencing the Japanese Yen, including ongoing US-China trade tensions and shifts in Japanese politics. Despite these challenges, the daily chart shows that AUD/JPY is above the 100-day EMA, supported by bullish momentum. However, the RSI indicates that prices may drop further before any potential rise.

Resistance And Support Levels

For AUD/JPY, the first resistance level is at 98.50, followed by 99.50. The psychological level of 100.00 is the ultimate target. On the downside, support is significant at 96.50, with another risk point at 96.15. If this level is broken, the AUD/JPY could fall to around 95.00-94.90. The value of the Japanese Yen is influenced by the Bank of Japan’s policy, bond yields, and global risk sentiment. Historically, the BoJ’s monetary policy has led to Yen depreciation, but recent changes have provided some support. During market stress, the Yen usually gains as a safe-haven asset. As of October 17, 2025, AUD/JPY is trading near 97.10, with a long-term bullish outlook but showing short-term weakness. The bearish signal from the RSI suggests further declines may occur before the upward trend resumes. For derivative traders, this situation offers complexity but also many opportunities. The strength of the Australian dollar is supported by recent economic data, helping to offset some negative sentiment. For instance, Australia’s September inflation report was 3.1%, slightly above the forecast of 2.9%, keeping the Reserve Bank of Australia in a hawkish position. This should provide ongoing support for the AUD against the Yen.

Japanese Political Uncertainty

On the Japanese side, political uncertainty after the collapse of the LDP coalition could lead to Yen weakness. However, comments from the Bank of Japan suggest they remain cautious about further policy changes, particularly since the latest Tankan survey indicated a dip in business confidence. This caution reduces expectations for a rapidly strengthening Yen, which creates some stability for the AUD/JPY cross. Given the potential for an upward move, buying call options with a strike price above the 98.50 resistance level could be a smart way to prepare for a rally towards the psychological mark of 100.00. This strategy allows traders to benefit from potential gains while controlling their maximum risk to the premium paid. We must also acknowledge the weak RSI and the possibility of a drop toward the 96.50 support level, which aligns with the 100-day moving average. To manage this downside risk, buying put options with a strike near 96.00 could be a useful hedge against short-term downward momentum. This approach protects existing long positions or can be a speculative bet on a brief sell-off. We saw a similar situation in 2022-2023, when divergence in central bank policies primarily drove Yen weakness. This period teaches us that while the overall trend can be strong, sharp pullbacks due to global risk-off sentiment can occur, and we need to prepare for them. Create your live VT Markets account and start trading now.

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