Published: 10 December 2025,08:03
Daily Market Analysis New
*Earlier hawkish comments from Governor Ueda and advisor Aida supported the Yen, but Ueda’s latest remarks on boosting bond purchases introduced a dovish offset.
*The currency has given back early-month gains as markets reassess Japan’s policy trajectory.
*Today’s FOMC outcome and Powell’s tone will heavily influence global yield spreads and set the near-term direction for JPY ahead of the BoJ meeting.
The Japanese Yen has relinquished a portion of its early-month recovery, trading softer against most G7 peers as market sentiment shifts ahead of a pivotal week for global central banks. The currency had initially stabilized from its October sell-off on the back of explicit signals from Bank of Japan Governor Kazuo Ueda, who indicated the central bank’s readiness to resume its rate-hike cycle, thereby beginning to normalize its longstanding ultra-accommodative policy stance.
This hawkish rhetoric, combined with supportive commentary from government advisor Takuji Aida regarding Japan’s ample reserves for currency intervention, had provided a floor for the Yen ahead of the BoJ’s December 18-19 policy meeting.
However, momentum reversed at the start of this week following remarks from Governor Ueda addressing the rapid rise in Japanese long-term bond yields. His suggestion that the BoJ may consider ramping up bond purchases to temper the surge has been interpreted as a dovish counterweight to earlier hike signals, applying fresh downward pressure on the currency.
All eyes now turn to today’s Federal Reserve policy decision and the subsequent press conference from Chair Jerome Powell. The rhetoric from the Fed will significantly influence global yield differentials and risk sentiment, thereby providing critical context for the BoJ’s own impending decision. The Yen’s near-term path will be dictated by this interplay between domestic policy nuances and the external monetary policy landscape.
Technical Analysis
The AUDJPY pair continues to trade within a well-defined and robust uptrend, maintaining its position above the primary long-term ascending support line. The prevailing structure remains bullish, although the pair is exhibiting early signs of a near-term technical correction following its sustained advance.
This corrective phase is likely to test a key technical area known as a Fair Value Gap (FVG) in the vicinity of 103.40. This zone represents a prior imbalance in price and often acts as a magnet for retracements before the dominant trend resumes. The pair’s ability to find support and stabilize above this level will be critical; a successful hold would suggest the correction is merely a pause within the broader bullish trajectory and would likely present a renewed buying opportunity.
Momentum indicators continue to reflect underlying strength, supporting the constructive outlook. The Relative Strength Index (RSI) has pushed into overbought territory, affirming strong buying pressure, albeit signaling the potential for consolidation. Meanwhile, the Moving Average Convergence Divergence (MACD) holds firmly above its zero line and continues to trend higher, confirming that bullish momentum remains intact.
Resistance Levels: 104.90, 105.95
Support Levels: 103.55, 102.35
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