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The AUD/JPY pair has rebounded from earlier losses, gaining 0.38% on Tuesday amid heightened geopolitical tensions in the Middle East. The recovery is driven by hawkish remarks from Reserve Bank of Australia (RBA) Governor Bullock, which bolstered demand for the Australian Dollar. Despite a risk-off market environment, the cross climbed to 111.62 at the time of writing, approaching its year-to-date (YTD) high near 112.00. The RBA's potential policy tightening and the Japanese Yen's weakness against majors are key factors underpinning the pair's upward momentum. For traders, the AUD/JPY's movement reflects the interplay between central bank policies and geopolitical risks. The RBA's dovish-to-hawkish pivot could pressure the Yen further, while Middle East tensions may drive safe-haven flows into Gold and the Japanese Yen, creating a mixed environment. Traders should monitor RBA's upcoming policy statements and regional conflict developments for directional clues. Looking ahead, the pair's ability to break above 112.00 could signal stronger bullish momentum, testing key resistance levels. Conversely, a pullback below 111.00 may indicate renewed bearish sentiment. Investors should also watch for shifts in risk appetite and commodity prices, as Australia's Dollar is closely tied to global resource demand.
