AUD/JPY Slumps as Middle East Tensions Escalate

The Australian Dollar has weakened against the Japanese Yen as risk-appetite shifted sour due to escalating tensions in the Middle East. The conflict between the US and Iran has broadened, with Yemen's Houthis taking on Saudi Arabia for control of the Red Sea. As a result, the AUD/JPY exchange rate has dropped 0.27% to 110.53.

The bearish trend continues, with the AUD/JPY trading sideways beneath its 200-day Simple Moving Average at 110.88. This is now its fourth straight day of decline since September 4, when US Treasury Secretary Bessent's threats seemed to favor the Yen over other currencies.

Technical indicators point to further downside for the AUD/JPY. The Relative Strength Index remains bearish, and breaking through support levels could expose even lower prices. Key targets include 110.00 and the March 31 daily low of 108.79, with a breach of these levels potentially leading to a drop all the way down to 107.69.