The AUD has reasons for strength right now. Firstly, China is moving towards a looser policy stance with the PBoC expected to cut rates again and China’s Gov’t affirming their commitment to keep stock markets stable. Secondly, surging commodities support the AUD. Thirdly, the RBA is at a turning point. See an article written on this here.
The JPY has reasons for weakness over the medium term. Firstly, the BoJ kept up their ultra-easy monetary policy stance at the last BoJ meeting. Secondly, they were unfazed by yen weakness. Thirdly, they kept up their commitment to keep the Japanese 10-year bond yield at 0%. Expecting dip buyers on the AUDJPY pair is not unreasonable given current market conditions.
Over the last 15 years, AUDJPY has risen 11 times with an average return of 2.34%. So, do the strong fundamentals and seasonals make the AUDJPY a good pair to buy in dips right now?
Major Trade Risks: If the Russian/Ukraine risk fades then commodities could fall from their recent high levels which could also weaken the AUD. Remember, the AUD is very sensitive to iron ore and coal prices dues to the large volume of exports from Australia.