Aussie-Yen Is Set to Approach Three-Decade High, Analysts Say

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessAussie-Yen Is Set to Approach Three-Decade High, Analysts SayThe Australian dollar is poised to climb back toward a 35-year high against the yen as the impact of Tokyo’s currency intervention fades and the Reserve Bank of Australia’s hawkish stance bolsters the exchange rate, according to strategists.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.py8r7jnm2cbnwdv9e5bjgi)t_media_dl_1.png Bloomberg(Bloomberg) — The Australian dollar is poised to climb back toward a 35-year high against the yen as the impact of Tokyo’s currency intervention fades and the Reserve Bank of Australia’s hawkish stance bolsters the exchange rate, according to strategists.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe currency pair is already recovering after dropping more than 4% toward the 109 level following Japanese currency intervention. It closed around 111.52 last week.Expectations of a further recovery underscore views that interventions by Japanese authorities will offer only temporary relief for the yen against currencies backed by higher interest rates. With the next RBA policy decision on the horizon, analysts are increasingly betting that rate differentials will overshadow Tokyo’s market smoothing efforts.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“Much of the shift on the yen leg is done,” said Mahjabeen Zaman, head of FX research at ANZ Group Holdings Ltd. in Sydney, adding that further Japanese intervention is unlikely given clear signaling from the US on potential coordinated action.On the Australian side, Zaman expects the RBA to remain hawkish amid geopolitical and energy price uncertainties. “The positive terms-of-trade support for the Aussie will keep it resilient on the crosses,” she said.That shift in sentiment is already showing up in derivatives markets. The premium to hedge against a drop in Aussie-yen over the next month declined rapidly last week, signaling that traders are abandoning bearish bets.AT Global Markets Australia expects Aussie-yen to return toward its late-July levels, provided there’s no fresh intervention from Japanese or US authorities to support the yen over the short-to-medium term. Chief Market Analyst Nick Twidale said that improving geopolitical sentiment could further strengthen the Aussie.“The initial target will be 113.38, the July 29 low, with stronger resistance up near the annual high at 114.80,” Twidale said, pointing to rate spreads as a key driver behind the currency pair’s prior rally toward 115.Traders are now turning their attention to the RBA’s monetary policy decision on Aug. 11. The central bank is widely expected to keep interest rates on hold, though swap markets are still pricing in roughly a 50% probability of another quarter-point hike by year-end.That stance is backed by RBA Governor Michele Bullock’s comments late last month, when she affirmed that policymakers won’t hesitate to deliver additional rate hikes if needed.Not everyone is convinced the central bank’s stance can sustain a prolonged rally. Commonwealth Bank of Australia FX strategist Samara Hammoud cautions that Aussie-yen has limited room to run once the recent dip unwinds, forecasting the cross to slide toward 108 by the end of this quarter. Hammoud expects the RBA to hold rates steady for the remainder of the year before initiating rate cuts, while the Aussie faces additional headwinds from broader US dollar strength.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Yet, some other analysts maintain that the broader macroeconomic backdrop favors the Aussie.“The RBA will likely remain hawkish next week and this, along with the gradually fading effects of FX intervention to support the yen, should be positive for Aussie-yen,” said David Forrester, senior FX strategist at Crédit Agricole.This week’s main economic events: Monday, Aug. 10: Bank of Japan summary of opinions to July policy meeting, Indonesia consumer confidenceTuesday, Aug. 11: RBA rate decision and Australia business confidence, South Korea 10-day exports/imports, Malaysia industrial productionWednesday, Aug. 12: India CPIThursday, Aug. 13: New Zealand 2-year inflation expectations, RBA’s Kent speaksFriday, Aug. 14: Malaysia final 2Q GDP, China 2Q BoP current account balance, Australia 2Q home loans value, RBA’s Bullock speaks, New Zealand manufacturing PMINotice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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