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AUD/JPY is trading firmly above the 105.00 level at the start of 2026, extending a well-established bullish trend that has been building since mid-2025. The Australian dollar continues to outperform the Japanese yen as yield differentials, carry-trade demand, and resilient risk sentiment support the upside bias. On the daily chart, AUD/JPY last traded around 105.09, marking fresh multi-month highs and reinforcing the broader uptrend that has carried the pair from below 90 earlier in 2025 to current levels. AUD/JPY Price Action Reflects Strong Trend Continuation The daily structure shows a clear sequence of higher highs and higher lows, with price holding above previous breakout zones. Following a sharp recovery from the April 2025 lows, AUD/JPY has maintained upward momentum through the second half of the year, consolidating briefly before pushing higher again into December and early January. The absence of deep pullbacks suggests that bullish positioning remains orderly rather than speculative, a characteristic often seen in sustained trend phases rather than late-stage rallies. What Is Driving AUD/JPY Higher The strength in AUD/JPY is being driven by a combination of macro and structural factors: Interest rate differentials continue to favour the Australian dollar over the yen, supporting carry-trade flows The Japanese yen remains structurally weak despite shifts in Bank of Japan policy, limiting downside pressure on yen crosses Risk-sensitive currencies such as AUD remain supported by stable global growth expectations and commodity demand As long as these conditions persist, AUD/JPY is likely to remain bid on dips. Key Technical Levels to Watch on AUD/JPY From a technical perspective, traders are watching several important levels: Immediate support: 104.00–104.30, aligned with recent consolidation Near-term resistance: 105.50, followed by the psychological 106.00 level Broader trend support: 102.50–103.00, which would need to break to threaten the bullish structure AUD/JPY daily chart on January 2,2026 Source Tradingview A sustained daily close above 105.50 would likely confirm another leg higher, while a move below 104.00 could trigger a deeper but still corrective pullback. AUD/JPY Outlook for Early 2026 Looking ahead, AUD/JPY remains technically constructive as long as price holds above former resistance levels. Traders will be monitoring upcoming Australian economic data, shifts in global risk sentiment, and any further guidance from the Bank of Japan that could impact yen volatility. For now, the daily chart suggests the path of least resistance remains to the upside, with momentum intact and no clear reversal signals in place as 2026 gets underway. Why is AUD/JPY rising? AUD/JPY is rising because higher Australian interest rates and stronger risk appetite support the Australian dollar, while the Japanese yen remains structurally weak. Is AUD/JPY bullish right now? Yes. AUD/JPY remains in a bullish trend, with price holding above key support levels and momentum indicators showing continued upside strength. What moves AUD/JPY the most? AUD/JPY is mainly driven by interest rate differentials, global risk sentiment, commodity prices, and Bank of Japan policy signals.