AUD/JPY Price Forecast: Grinds higher above 112.50, yet stays constrained by mildly bearish bias

The AUD/JPY cross gathers strength to near 112.55 during the early European trading hours on Tuesday. The Japanese Yen (JPY) attracts some sellers against the Australian Dollar (AUD) after Reuters reported on Monday that Tokyo had no immediate plans to alter the asset allocation of its state pension funds, reducing expectations of near-term support for domestic assets.

Nonetheless, Japan’s Finance Minister Satsuki Katayama said the country’s massive pension fund would adjust its holdings if necessary, while also proposing the inclusion of government bonds in a tax-free investment program for individual investors.

Technical Analysis:

In the daily chart, AUD/JPY retains a mildly bearish bias as it holds just beneath the 100-day simple moving average (SMA). Price remains above the Bollinger middle band, suggesting some near-term demand, but the proximity of the upper band and the capping 100-day SMA reinforces a topside-constrained tone. The Relative Strength Index (RSI) at 49.81 sits near neutral, hinting at consolidative momentum rather than a clear directional drive.

On the topside, immediate resistance is seen at the 100-day SMA at 112.60, with a break exposing the Bollinger upper band near 113.40 as the next barrier. On the downside, initial support aligns with the Bollinger middle band at 112.30, ahead of a deeper cushion at the lower band around 111.25, where stronger buyers could attempt to reassert control if the current drift extends.