AUD/JPY Technical: Bearish signals suggest the end of medium-term uptrend as BoJ looms

The Bank of Japan (BoJ) will conclude its monetary policy today at 11.00 (SGT) and release its latest quarterly outlook report. It is widely expected that the BoJ will maintain its key short-term interest rate unchanged at 0.5%, its highest level since 2008, for the fourth consecutive meeting due to uncertainties on the impact of US trade tariffs.

Also, BoJ is likely to revise its inflation outlook higher for this fiscal year 2025 in its quarterly outlook report to 2.5% from 2.5% due to the secondary effects from US tariffs, while maintaining its inflation forecast unchanged at 1.7% for FY 2026, and 1.9% for FY 2027, according to consensus estimates.

Hence, the BoJ may continue to signal that an interest rate hike of 25 basis points is still “live” before 2025 ends, which in turn is likely to put a floor under recent weakness seen in the Japanese yen.

Let’s now focus our attention on a short to medium-term technical trading set-up on the AUD/JPY cross pair.

Bearish bias with key medium-term pivotal resistance at 97.30 and a break below 95.70 exposes the next medium-term supports at 94.80 (also the 50-day moving average) and 93.95.

• The appearance of a bearish “Double Top” configuration right below the former long-term secular ascending channel support from March 2020 suggests that the recent medium-term uptrend phase of the AUD/JPY from 9 April 2025 low is likely to have ended.
• The 4-hour MACD trend indicator has trended lower below its centreline, and it is now breaking below a key parallel ascending support in place since 22 May 2025. The observations suggest a medium-term uptrend termination on the AUD/JPY.
• The yield premium between the 2-year Australian government bond over the 2-year Japanese government bond has continued to shrink since 16 July 2025 which may put further downside pressure on the AUD/JPY.

A clearance above 97.30 shifts the focus back to the bulls on the AUD/JPY for the next resistance at 98.70 in the first step.

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