Japanese Yen and Aussie Dollar Forecasts: Trade News and US Jobs Report Hold the Key

Japan Labor Market Spotlights USD/JPY

With Japan’s labor market loosening, the Yen may be poised for key moves on Friday, May 2, putting the USD/JPY pair in the spotlight.

The unemployment rate rose unexpectedly from at 2.4% in February to 2.5% in March. Rising unemployment could slow wage growth, potentially dampening consumer spending and inflationary pressures. Meanwhile, the jobs/applications ratio increased from 1.24 in February to 1.26 in March, signaling rising labor demand.

The higher unemployment print overshadowed the rise in job openings, weighing on the Japanese Yen. Thursday’s BoJ policy statement limited the influence of job openings on the Yen, with policymakers citing potential tariff impacts on the economy, inflation, and the rate outlook.

Beyond the data, trade developments continue to influence USD/JPY trends. Progress toward trade deals with major US trading partners may dampen safe-haven flows into the Yen. In contrast, stalled negotiations or rising US-China trade tensions could fuel Yen appetite.

USD/JPY: Key Scenarios to Watch

• Bullish Yen Scenario: Rising trade tensions, stalled US-Japan trade talks, positive Japanese data, or hawkish BoJ guidance may push USD/JPY lower toward the 140.309 support.
• Bearish Yen Scenario: Easing trade tensions, a US-Japan trade deal, weak data, or a dovish BoJ stance could drive the pair toward the 147 level.

USD/JPY Daily Outlook: Focus on US Jobs Report

Later in today’s US session, the US Jobs Report will further influence sentiment toward the Fed’s rate path. Economists forecast average hourly earnings to rise 3.9% year-on-year in April, up from 3.8% in March, while expecting the unemployment rate to remain at 4.2%. Nonfarm payrolls are predicted to increase by 130k after a 228k jump in March.

Rising wages, falling unemployment, and higher nonfarm payrolls may temper Fed rate cut bets, boosting US dollar demand. A less dovish Fed stance may drive the USD/JPY pair toward 147, bringing the 149.358 resistance level into view. Conversely, weaker wage growth and rising unemployment may signal softer spending and inflation, raising Fed rate cut expectations. A more dovish Fed rate path could send the pair toward the 140.309 support level.

Don’t miss today’s full USD/JPY forecast with chart setups and trade ideas.

AUD/USD in Focus: Retail Sales and Inflation

The AUD/USD could see increased volatility on May 2. Economists forecast Aussie retail sales to rise 0.4% in March, following a 0.2% increase in February.

Rising consumer spending may fuel demand-driven inflation, potentially easing pressure for multiple RBA rate cuts. A less dovish RBA policy outlook may support Aussie dollar strength. Conversely, a drop in retail sales may increase expectations of multiple RBA rate cuts, weighing on the Aussie.

Following Wednesday’s softer inflation data, Aussie producer prices will also be key for the RBA outlook. Economists expect producer prices to rise 3.4% year-on-year in Q1 2025, down from 3.7% in Q1 2024. A weaker print could suggest waning demand and softer inflation, reinforcing the case for rate cuts. A higher figure may complicate that view and dampen dovish bets.

AUD/USD: Key Scenarios to Watch

• Bearish Aussie dollar Scenario: Rising US-China trade tensions, weaker Aussie data, or dovish RBA signals may drag AUD/USD below the $0.63623 support level.
• Bullish Aussie dollar Scenario: Easing US-China trade friction, upbeat Aussie data, or hawkish RBA rhetoric could drive the pair above the 200-day EMA toward $0.65.

Click here for a more comprehensive analysis of AUD/USD trends and trade data insights.

Aussie Dollar Daily Outlook: Will the US Jobs Report Sink Fed Rate Cut Bets

In the US session, upbeat labor market data could temper bets on multiple Fed rate cuts. A less dovish Fed policy stance may widen the US-Aussie rate differential in the US dollar’s favor, potentially sending AUD/USD below $0.63623.

Conversely, softer US wage growth and rising unemployment could raise Fed rate cut expectations, sending AUD/USD toward $0.65.

Key Market Drivers to Watch Today:

• USD/JPY: Japan trade developments, Japan’s economic data, and BoJ policy sentiment.
• USD/JPY and AUD/USD: US labor market and broader trade headlines.
• AUD/USD: Aussie economic data, RBA commentary, and Beijing’s stimulus updates.

For more in-depth analysis, review today’s USD/JPY and AUD/USD trading setups in our latest reports.