AUD/JPY Price Analysis: Bears advances after S&P PMIs, BoJ decision

• AUD/JPY trades at 97.12 with 0.40% losses.
• Daily chart indicators reveal sellers hold the momentum, in the immediate short term.
• Australian S&P PMIs were weak in January while the Japanese indexes were positive.

On Wednesday's session, the AUD/JPY finds itself trading near the 97.12 mark, registering a 0.45% decline. The currency pair's daily chart portrays a neutral to bearish outlook, with bears slowly gaining control. Meanwhile, signs of a negative stance are more pronounced as we glance at the four-hour chart. In that sense, the sellers recently gained ground on the back of the Bank of Japan’s hints on a potential pivot and positive economic figures from Japan.

In that sense, the Australian economy, as indicated by the preliminary S&P January PMIs, seems to be on a sluggish note, as the composite PMI has been below 50 for four consecutive months. On the other hand, the Japanese economy appears to be resilient with firm January PMIs across both manufacturing and services, in addition to robust December trade data. Moreover, the JPY seems to be finding demand as the expectations for the BoJ have shifted towards a potential rate increase around mid-year, as on Tuesday’s decision, Governor Ueda hinted that inflation seems to be aligning with the bank’s goal.

AUD/JPY daily chart

The indicators on the daily chart are currently portraying a diverse scenario. With the Relative Strength Index (RSI) in positive territory yet on a downward slope, there is an indication of weakening bullish momentum. Furthermore, diminishing green bars in the Moving Average Convergence Divergence (MACD) histogram reinforce this interpretation. However, the positioning above the essential Simple Moving Averages (SMAs) of 20, 100, and 200-day averages, acknowledge the dominant control of buyers over the extended trend.

A negative outlook is more pronounced on the four-hour charts. Here, the declining slope of the RSI reveals a strong bearish undercurrent, already in negative territory aligning with the falling green bars of the MACD.

AUD/JPY daily chart