AUD/JPY Price Forecast: Weakens below 111.00, remains capped below 100-day SMA

The AUD/JPY currency pair is currently trading in negative territory around 110.75 during early European trading hours on Tuesday. Recent hawkish comments from Bank of Japan policymakers have strengthened the perception that the BoJ will raise interest rates this month, providing support for the Japanese Yen against the Australian Dollar.

BoJ board member Hajime Takata suggested last week that the central bank could adopt a more aggressive approach than expected, with a 25-basis-point hike of up to 1.25% at their upcoming policy meeting on September 17-18. Analysts at MUFG highlight the shift in tone from the BoJ, citing Takata's remarks that the Bank should conduct rate hikes swiftly and not be bound by specific market expectations.

The AUD/JPY remains under a dense band of resistance and is trading below the 100-day simple moving average, indicating a bearish near-term outlook. The immediate resistance level is at the August 10 low of 111.63, with further key resistance at the 100-day SMA and Bollinger midline around 113.15-113.25. The psychological level of 110.00 provides some initial support. If the pair breaks below this level, the next target to watch is the August 3 low of 109.24.