AUD/JPY Sours on Lack of Hawkish Guidance from BoJ

The AUD/JPY currency pair is trading in negative territory around 111.95 during the early European session on Wednesday, weighed down by a lack of explicitly hawkish guidance from the Bank of Japan (BoJ) after its recent rate hike.

Despite raising its policy rate to 1.25% last week, the BoJ's decision was seen as less aggressive than expected, with two policymakers dissenting from the majority vote.

The Reserve Bank of Australia (RBA) Governor Michele Bullock also weighed in on Tuesday, stating that supply shocks are difficult for monetary policy to deal with and highlighting the need for policy to address second-round effects on inflation.

Technical analysis suggests that the AUD/JPY retains a bearish near-term bias as spot holds beneath the 100-day moving average. Key support levels include the 100.00 psychological level and the September 14 low of 109.67, while resistance is seen at the Bollinger middle band at 112.05 and the 100-day moving average at 112.85.