AUD/JPY to 112.50 by November 3 as the RBA hikes into a split BOJ

AUD/JPY reaches 112.50 by November 3, 2026 in the base case, 114.50 in the bull case and 108.00 in the bear case, because the Reserve Bank of Australia (RBA) is tightening into a Bank of Japan (BOJ) board where two of nine members voted against hiking at all.

AUD/JPY traded at 110.41 at 07:29 UTC on Monday, September 28, 2026 (CNBC), with the Financial Times quoting 110.47 at 06:49 UTC. The Australian two-year government bond yielded 5.058% against 1.971% for the Japanese two-year, a gap of 309 basis points, and markets price roughly a 90% chance that the RBA lifts its cash rate from 4.35% to 4.60% on Tuesday. The sections below show why the yen leg cannot keep pace, and the four signals that would break the call.

Key Levels:

• Asset: AUD/JPY at 110.41, 07:29 UTC, September 28, 2026 — CNBC quote feed, cross-checked against FT Markets (110.47)
• Base case target: 112.50 by the RBA decision on November 3, 2026 — reclaims the 50-day (112.30) and 100-day (112.66) moving averages as the policy gap widens to 335 basis points
• Bull case target: 114.50 — if September-quarter trimmed mean inflation, due October 28, prints 1.0% or more and money markets price a November hike
• Bear case target: 108.00 — if Tokyo intervenes again or the RBA pairs a hike with an explicit end-of-cycle signal
• Major support: 109.62 (September 14 low) and 109.19 (August 3 low after the joint yen intervention) — CNBC daily bars
• Major resistance: 112.61 (September 18 high, BOJ decision day), then 114.99 (August 28, the 52-week high) — CNBC daily bars
• Invalidation level: daily close below 109.19 — breaks the post-intervention floor that has held for eight weeks

Methodology: two central banks, one spread, one board vote

Spot, two-year yields and moving averages come from the CNBC quote and chart feeds, pulled at 07:29 UTC on September 28, 2026, with spot checked against FT Markets. Policy rates and dates come from the RBA cash rate target table, the RBA board meeting schedule and the BOJ’s own statement of September 18, 2026, read in full from the PDF. Positioning is the CFTC Commitments of Traders (COT) legacy futures report for September 22, 2026, covering the CME yen and Australian dollar contracts. Inflation data is from the Australian Bureau of Statistics (ABS). Caveat: this was written before Tuesday’s RBA announcement at 2:30pm AEST (04:30 UTC).

Related:USD/CAD to 1.4250 by October 28 as the Fed hike outruns $92 oil

The data: a 309bp gap and a yen that weakened on a hike

The RBA has raised its cash rate three times this year, at the February, March and May meetings, taking it from 3.60% to 4.35%, then held in June and August. Its August 11 statement said the Board would consider “increasing the cash rate target further if upside risks materialise”. Trimmed mean inflation was 3.6% in the 12 months to July (ABS), above the 2–3% target band.

Sources: RBA cash rate target table and board schedule; BOJ statements of June 16 and September 18, 2026 and MPM schedule; CNBC yield quotes, 07:29 UTC September 28, 2026. Time window: January 1 to September 28, 2026.

What is the AUD/JPY carry gap in September 2026? The AUD/JPY carry gap is the difference between what a holder earns on Australian dollars and pays on Japanese yen, and on September 28, 2026 it stood at 310 basis points at the policy-rate level: the RBA cash rate target of 4.35% against the Bank of Japan’s 1.25% overnight call rate guideline, which took effect on September 24. At the two-year point of the curve, where currency traders look for expected policy, the gap was 309 basis points, with the Australian two-year at 5.058% and the Japanese two-year at 1.971% on CNBC’s quote feed. A 25-basis-point RBA hike on September 29 would widen the policy gap to 335 basis points, the widest point this year. The gap has survived two BOJ hikes in 2026 because Australia has tightened by 75 basis points while Japan has tightened by 50, so each yen move has been matched or exceeded from Sydney.

The market reaction to the BOJ’s own hike says the most. AUD/JPY closed at 110.87 on September 17 and 111.75 on September 18, touching 112.61 intraday. The yen weakened on a rate increase because the vote was split.

“We now expect the RBA to hike the cash rate by 25 basis points to 4.60% at its 28-29 September meeting.”

— Belinda Allen, Head of Australian Economics, Commonwealth Bank of Australia (CommBank Newsroom)

The mechanism: two dissents cap the yen’s tightening speed

The BOJ statement of September 18 records that the Policy Board decided “by a 7-2 majority vote” to move the overnight call rate to “around 1.25 percent”, effective September 24. The note names the dissenters as Asada Toichiro and Sato Ayano. Neither argued for a smaller or slower hike. Asada dissented “considering that, with the rate of increase in the CPI (all items less fresh food) being below 2 percent recently, it could not necessarily be said that the economic situation was strong”. Sato dissented on the view that “it was not appropriate for the Bank to raise the policy interest rate at this time.”

That is a shift on the board. In April, three members dissented on the hawkish side and proposed a hike to 1.0% that the majority refused. In July, Takata Hajime proposed 1.25% and lost 8–1, with both Asada and Sato voting with the majority to hold. By September the pressure had flipped: the hawks got their hike, and two members said there should have been none. Asada had already dissented against the June hike to 1.0%.

Why does a split BOJ board matter for AUD/JPY? A split BOJ board matters because it limits how fast Japanese rates can rise while Australian rates are still climbing, and the currency pair trades on the difference between the two. The BOJ statement of September 18, 2026 says the Bank “will continue to raise the policy interest rate”, so the direction is not in doubt. The speed is. Two of nine members, Asada Toichiro and Sato Ayano, voted against the September hike outright, and the next BOJ meeting on October 29–30 falls just six weeks later. A back-to-back hike would require the majority to override the same two dissents again with only one new round of inflation data; core inflation was 1.7% in August, per CNBC, below the 2% line Asada cited. Meanwhile the RBA can hike on September 29 and keep November 3 live. The asymmetry favours the Australian leg for this five-week window.

Positioning adds fuel. The CFTC report for September 22 shows speculators net long 71,982 yen contracts, down from roughly 120,000 a week earlier after non-commercial longs were cut by 45,677. The same report shows speculators net short 46,814 Australian dollar contracts. Both books lean against the call: yen longs still to unwind, Australian dollar shorts still to cover.

The opposing view deserves weight. A 90% priced hike offers little surprise, and AUD/JPY trades below its 20-, 50-, 100- and 200-day moving averages, a picture of a pair in a downtrend since August 28. We covered the yen-side positioning risk in the crowded-yen-long case for CHF/JPY, the Australian-side rate path in the AUD/CAD rate-gap call, and the RBA leg against sterling in the GBP/AUD divergence case.

What the model misses: Tokyo’s intervention ceiling

A rate-differential model has no term for the Ministry of Finance. On Friday, July 31, 2026, Japan and the US Treasury bought yen in a coordinated operation after USD/JPY hit 163.73 the day before. AUD/JPY fell from 114.23 on July 28 to 110.63 on July 31 and printed 109.19 on August 3. US Treasury Secretary Scott Bessent said “Friday’s coordinated foreign exchange actions countered disorderly yen movements”, per CNBC, and Tokyo said it “will not hesitate to conduct further coordinated interventions in the future”. USD/JPY was 157.46 on Monday. For AUD/JPY to reach 112.50 with USD/JPY flat, AUD/USD needs about 0.7145, up from 0.7012. The call therefore needs help from the Australian dollar rather than a weaker yen, since pushing USD/JPY back towards 163 invites Tokyo. Our earlier look at intervention’s half-life on USD/JPY set out how quickly that ceiling reasserts itself.

“But by the time it gets to the November meeting there is likely to be more evidence of a cooling economy, falling home prices, a softer jobs market and rising recession risks, so we don’t think a second hike let alone a third will be necessary.”

— Shane Oliver, chief economist, AMP (quoted by ABC News)

What would invalidate this call

The base case to 112.50 breaks if any one of these four signals fires:

• The RBA holds at 4.35% on September 29, or hikes and says the cycle is over. The thesis needs the Australian leg to keep widening; a hold or a closing signal removes it.
• The BOJ hikes to 1.50% on October 30, or the Summary of Opinions on October 1 shows members pushing for a faster pace. Either would mean the two dissents do not constrain the majority.
• Japan intervenes again, or USD/JPY falls below 150. Official yen buying hits every yen cross at once and overrides carry.
• AUD/JPY closes a day below 109.19. That breaks the post-intervention low and signals the move is risk-off, not rates.

What to watch next: September 29 to November 3

Tuesday, September 29, 2:30pm AEST: the RBA decision and vote tally, then Governor Michele Bullock’s press conference at 3:30pm. September 30: the ABS monthly CPI for August. October 1: the BOJ Summary of Opinions from the September meeting, the first look at how the seven-member majority answered the dissents. October 28: the ABS September CPI with the quarterly trimmed mean; CBA has said a result of 1% or more “could nevertheless put another increase on the table”. October 29–30: the BOJ meeting with a new Outlook Report. November 3, 2:30pm AEST: the RBA decision that closes the window.

TL;DR

AUD/JPY at 110.41 is set to reach 112.50 by the November 3 RBA decision. The RBA is about 90% priced to lift its cash rate to 4.60% on September 29, which would widen the policy gap with Japan to 335 basis points. The BOJ hiked to 1.25% on September 18, but on a 7–2 vote in which Asada Toichiro and Sato Ayano opposed any hike (BOJ statement), which makes a second hike on October 30 harder. The yen weakened on the day. The call fails on a daily close below 109.19, a BOJ hike in October, or fresh intervention from Tokyo.

FAQ

What is the AUD/JPY forecast for November 2026?

The base case is 112.50 by November 3, 2026, the day of the RBA’s November decision, from 110.41 on September 28. The bull case is 114.50 if Australian September-quarter trimmed mean inflation prints 1.0% or more on October 28. The bear case is 108.00 if Tokyo intervenes again. The drivers are an expected RBA hike to 4.60% and a divided BOJ board.

Who dissented at the Bank of Japan in September 2026?

Board members Asada Toichiro and Sato Ayano voted against the September 18 hike to 1.25%, which passed 7–2. Asada argued that core inflation was below 2% and that the economy could not necessarily be called strong. Sato argued that economic and price developments had not substantially accelerated and that it was not appropriate to raise rates at this time, according to the BOJ statement.

When is the next RBA meeting after September 2026?

The RBA Monetary Policy Board meets on November 2–3, 2026, with the decision released at 2:30pm AEST on November 3, and again on December 7–8, according to the RBA’s published board schedule. The November meeting comes with the quarterly Statement on Monetary Policy and follows the ABS September-quarter inflation release on October 28, which makes it the most informative decision in this window.

Why did the yen weaken after the BOJ raised rates?

The yen weakened because traders focused on the 7–2 vote rather than the hike itself. Two members opposed raising rates at all, which lowered expectations for how quickly the BOJ can follow up. AUD/JPY rose from 110.87 to 111.75 on September 18, per CNBC daily data, and speculators cut yen longs by 45,677 contracts in the week to September 22, per the CFTC.

This article is informational analysis only and is not financial, investment, or trading advice. Foreign-exchange, commodity, and equity markets are highly volatile and can lose substantial value rapidly. Leveraged products carry total-loss risk and may exceed the initial margin posted. Past performance and historical correlations do not guarantee future results. Do your own research and consult a regulated financial adviser before making any investment decision.