Japanese Yen and Aussie Dollar Forecasts: Will USD/JPY Break 145 as US Jobs Report Looms?

Japan Wage Growth and Spending: Can Wage Hikes Drive Consumption?

Could Japan’s wage surge spark a historic shift in BoJ policy? Japanese household spending and wage growth fueled speculation about a Bank of Japan rate hike, influencing USD/JPY.

Household spending rose 1.7% month-on-month in July, recovering from June’s 5.2% slump. The rebound in private consumption indicates wage hikes are translating into stronger spending. Rising consumer spending trends may fuel demand-driven inflation, supporting a more hawkish BoJ rate path.

Furthermore, average cash earnings increased 4.1% year-on-year in July, accelerating from 2.5% in June. The continued rise in wages could further boost household spending, crucial for the Bank of Japan’s monetary policy outlook.

The USD/JPY pair moved from 148.428 to 148.370 after the release of the data. The post-data moves reflected positive sentiment toward the data and rising bets on a Q4 BoJ rate hike.

Why do traders need to scrutinize Japan’s consumer spending data?

Private consumption accounts for around 55% of Japan’s GDP. The Japanese economy expanded 0.3% quarter-on-quarter in the second quarter, following 0.1% growth in the first quarter. Private consumption remained weak by historical standards, rising 0.2%. For context, private consumption increased 1% in Q2 2024, contributing to 0.8% economic growth.

In July 2024, the Bank of Japan cut Japanese Government Bond (JGB) purchases and raised interest rates by 25 basis points in response to strengthening economic momentum. Notably, the July 31, 2024, monetary policy decision triggered a sharp yen carry trade unwind. The unwind sent risk assets crashing and USD/JPY down from a pre-policy decision high of 161.951 to a September 2024 low of 139.576.

Rising bets on an October BoJ rate hike could heighten market volatility. A more hawkish-than-expected BoJ policy move may fuel a carry trade unwind, mirroring the events in Q3 2024.

USD/JPY Daily Outlook: US Jobs Report to Fuel Fed Rate Cut Bets

Later Friday, the highly anticipated US Jobs Report will drive expectations of multiple Fed rate cuts.

Rising unemployment, weaker nonfarm payrolls, and softer wage growth could raise bets on multiple Fed rate cuts. A cooling labor market may affect consumer sentiment and dampen spending. Weaker spending could slow economic momentum, given that private consumption accounts for around 67% of US GDP.

The USD/JPY could break beiow the 200-day and 50-day EMAs on a more dovish Fed policy stance. If breached, 145 would be the next key support level.

Conversely, better-than-expected data may signal a less dovish Fed rate path, sending the pair toward the 149.358 resistance level.

With both the BoJ and Fed shaping policy paths, traders should closely monitor central bank rhetoric. Shifts in monetary policy could fuel USD/JPY volatility.

USD/JPY: Key Scenarios to Watch

• Bearish USD/JPY Scenario: Hawkish BoJ cues, weaker US labor market data, or dovish Fed signals could push USD/JPY toward 147.5
• Bullish USD/JPY Scenario: Dovish BoJ rhetoric, strong US data, or hawkish Fed chatter could drive the pair toward the 149.358 resistance level.

Read the full USD/JPY forecast, including chart setups and trade ideas.

While traders speculate over the BoJ rate path, the RBA’s policy stance also faces scrutiny, with economists signaling an RBA rate cut in Q4.

AUD/USD: Aussie Labor Market Data in Focus

Turning to the AUD/USD pair, Australian labor market data will influence sentiment toward RBA monetary policy. The ABS will release the labor account and multiple job-holder data for the June quarter.

Declines in total and filled jobs may affect wage growth and consumer spending. Softer spending could dampen demand-driven inflation. A more dovish RBA policy stance would weigh on the Aussie dollar. Conversely, rising total jobs and filled jobs could temper market expectations for an RBA rate cut, lifting appetite for the Aussie dollar.

For context, the ABS reported a 0.2% fall in total jobs and a 0.1% decline in filled jobs in the March quarter. Significantly, multiple job-holders slid 2.8% in the quarter. Unemployment increased from 4% in December 2023 to 4.1% in March 2024. Aussie unemployment rose to 4.3% in June 2025, the highest level since November 2021, suggesting weak numbers.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Weaker jobs data or dovish RBA rhetoric. These factors could push AUD/USD toward the $0.65 level.
• Bullish AUD/USD Scenario: Positive data or hawkish RBA signals. These factors could send AUD/USD toward the $0.6550 resistance level.

See our full AUD/USD analysis for detailed trends and trade setups.

AUD/USD Daily Outlook: How Will the US Jobs Report Impact Rate Differentials?

While economists expect a Q4 RBA rate cut, uncertainty lingers over the Fed’s rate path through the fourth quarter.

A cooling US labor market would support multiple Fed rate cuts, narrowing the US-Aussie interest rate differential in favor of the Aussie dollar. A narrower rate differential may send AUD/USD toward the $0.6550 level.

Conversely, data reflecting a resilient US labor market may signal a less dovish Fed rate path. Expectations of fewer Fed rate cuts may widen the rate differential, sending AUD/USD toward the 50-day Exponential Moving Average (EMA) and the $0.65 support level. If breached, the 200-day EMA would be the next key support level.

Key Market Drivers to Watch Today:

• USD/JPY: BoJ comments and Japanese economic data.
• USD/JPY and AUD/USD: US Jobs Report.
• AUD/USD: Aussie economic data and RBA policy rhetoric.

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