AUD/JPY Soars to Near 113.50 Amid Monetary Policy Divergence

The Australian dollar has strengthened against the Japanese yen, pushing the AUD/JPY cross to near 113.50. This recent gain is attributed to a combination of factors, including firmer risk appetite and a relatively hawkish stance from the Reserve Bank of Australia (RBA). In contrast, the Japanese yen remains under pressure due to the Bank of Japan's continued ultra-loose monetary policy.

The AUD/JPY pair has been supported by Australia's central bank maintaining a tightening bias, with markets pricing in further rate hikes. This divergent monetary policy expectation has made the Australian dollar a more attractive funding currency compared to the yen. Additionally, commodity prices, particularly iron ore and coal, have remained firm, underpinning the Aussie.

From a technical perspective, the pair has broken above its 50-day moving average, indicating a bullish signal. The next resistance level is seen around 114.00, followed by 114.50. Traders should monitor upcoming economic data from both Australia and Japan, as well as any commentary from RBA and BOJ officials.