AUD/JPY One Step Away from Multi-Decade Historical High

The Australian dollar extended its strength against the Japanese yen on Thursday, trading near 114.67, just a step away from a multi-decade historical high. The intraday high earlier was only 19 points below the ceiling that this currency pair has not breached since September 7, 1990, signaling extremely strong upward momentum.

**Risk Appetite Recovery as Key Driver**

Recent gains in global equities have significantly lifted market risk sentiment, providing solid support for the Australian dollar, a currency highly sensitive to risk appetite. According to reports, Bloomberg strategists noted that the positive correlation between the AUD and the S&P 500 has risen to its highest level this year, making it a high-beta tool for expressing global risk sentiment. Against the backdrop of sustained strength in U.S. stocks and a softer dollar, this linkage is strongly underpinning AUD buying.

**Technical Outlook Remains Bullish**

From a technical perspective, AUD/JPY remains near its highs, trading well above the 50-day exponential moving average at the 113.00 level, indicating a solid medium-term uptrend. Meanwhile, the daily stochastic relative strength index is near 84, entering overbought territory, yet reflecting that the current bullish momentum has not yet faded. The pair has gained 3.80% so far in August, and if it can effectively break through key resistance, further upside potential could open up.