Analysing AUD/JPY weakness driven by yen strength & yield spread. Our technical analysis identifies a potential trend change and key support/resistance levels for traders.
Weakness in the major G-10 yen crosses has resurfaced over the past two weeks, driven by a narrowing of the 2-year sovereign yield premium spread between US Treasuries and Japanese Government Bonds (JGBs), as well as rising systemic risk stemming from concerns over US trade tariffs.
Based on a rolling three-month performance as of 4 April, the AUD/JPY is the second-worst performing (-6.8%) major yen cross pair, just hovering above the worst hit USD/JPY (-7.4%) at the time of writing (see Fig 1).
Fig 1: 3-month rolling performance of G-10 JPY crosses with 2-year US Treasury/JGB yield spread as of 4 Apr 2025 (Source: TradingView)
Fig 2: AUD/JPY major & medium-term trends as of 7 Apr 2025 (Source: TradingView)
In the lens of technical analysis, the AUD/JPY may have just undergone a structural change in its trend movement.
Firstly, the AUD/JPY retested and formed a bearish reaction on its 50-day moving average on Wednesday, 2 April, followed by a bearish breakdown of its former long-term secular ascending channel support on Thursday, 3 April.
Secondly, it has a daily and weekly close below its former key medium-term swing low of 90.14 from 5 August 2024 on Friday, 4 April.
These observations have reinforced a potential change of its former long-term secular uptrend phase in place since March 2020 to materialise into a likely multi-week corrective decline movement (see Fig 2).
In addition, the daily MACD trend indicator has flashed out a bearish crossover condition right below its centreline on 3 April that supports the potential start of a multi-week corrective decline phase.
Watch the 92.50 key medium-term pivotal resistance, and a break below the 87.00 intermediate support exposes the medium-term supports at 83.90/82.70, and 80.50.
On the flipside, a clearance above 92.50 negates the bearish scenario for the next medium-term resistances to come in at 95.50, and 98.70 (also close to the key 200-day moving average).
