AUD/JPY Falls as Yen Strength Continues Amid BOJ Rate Hike Expectations

The Australian dollar fell against the Japanese yen on Monday as the carry trade continues to suffer. According to Christopher Lewis, a technical analyst at DailyForex, the Japanese yen has been strong due to expectations of a Bank of Japan rate hike.

Lewis notes that in the long term, the interest rate differential between Australia and Japan will be significant, but for now, the focus is on short-term support levels. The AUD/JPY pair has dropped significantly over the past couple of days, breaking through short-term support at 112 yen.

Lewis believes that the 200-day EMA at 110 yen will provide major support, and any rally above 114 yen would indicate a shift in sentiment. However, for now, he anticipates continued yen strength or 'stickiness' in yen-positive pairs until the Bank of Japan interest rate decision.