Japanese Yen Gains Focus as BoJ Signals Policy Shift, AUD/USD Awaits Inflation Data

Japanese Yen Outlook: BoJ vs Fed Rate Path

The Japanese Yen (JPY) remains in the spotlight as traders weigh fresh signals from Japan’s economic indicators. The Leading Economic Index (LEI), due Monday, is expected to confirm an uptick in momentum after rising to 106.1 in June from 104.8 in May. Stronger job offers and consumer confidence could reinforce expectations that the Bank of Japan (BoJ) will hike rates in Q4, keeping demand-driven inflation alive.

At the same time, the USD/JPY pair is hovering near key levels, with traders eyeing the 145.00 support zone. If US economic data weakens while BoJ commentary turns more hawkish, the Yen could extend gains. Conversely, upbeat US figures may keep USD/JPY anchored closer to the 150.00 barrier.

USD/JPY Key Scenarios

Bearish Case: Strong Japanese data + dovish Fed signals = Slide toward 145.00
Bullish Case: Weak Japanese data + hawkish Fed = Rally toward 149.30–150.00

Traders will also watch Fed Chair Jerome Powell’s Jackson Hole tone. Any emphasis on inflation could cap Fed rate-cut bets, supporting the US Dollar.

AUD/USD: Inflation Report Could Decide RBA’s Next Move

The Australian Dollar (AUD) remains under pressure after the Reserve Bank of Australia (RBA) recently cut rates. Traders now await July’s Monthly CPI report (Aug 27), which is forecast to rise from 1.9% to 2.2%.

Hotter-than-expected CPI could reduce chances of a November rate cut, lifting AUD/USD above the $0.65 handle and opening the path to $0.6550.
Softer CPI would reinforce expectations of another quarter-point cut in November, dragging AUD/USD back toward $0.6450 or even $0.6400.

Despite ongoing weakness, some analysts note that rising wages and improving consumer sentiment may temper RBA easing. According to AMP Chief Economist Shane Oliver, the RBA could cut again in November, February, and May, potentially taking rates down to 2.85% by mid-2026.