🔍 JPY & AUD Forecast: Fed Signals, Spending Data, and Turnover Trends Set the Stage for Volatility

Key Insight: Japanese household spending and Australian business turnover figures are in focus alongside Federal Reserve commentary, setting up key directional risks for both USD/JPY and AUD/USD pairs.

🇯🇵 USD/JPY Outlook: All Eyes on Japan Spending Data and Fed Policy Cues

The Japanese Yen (JPY) is poised for potential movement as markets brace for the release of June household spending data. Expectations are for a 3.0% month-on-month decline, following a 4.6% surge in May, raising questions about the sustainability of consumption-led growth in Japan.

Given that private consumption accounts for over 50% of Japan’s GDP, a steep drop could weaken demand-driven inflation, potentially delaying any further Bank of Japan (BoJ) rate hikes.

However, wage growth offers a silver lining. Average cash earnings rose 2.5% YoY in June, up from 1.4% in May. Rising wages may offer a buffer to the decline in household spending, supporting consumption into Q3.

🧾 Additional Factors in Focus:

BoJ’s Summary of Opinions will offer more clarity on rate policy direction.
US tariffs on Japan, raised to 30% by President Trump, may strain economic sentiment further.
Markets are now assessing both domestic data and trade developments to anticipate BoJ policy changes.

📉 USD/JPY Technical Scenarios: Key Levels to Watch

Bearish Case: Strong household spending or dovish Fed commentary could push USD/JPY below the 50-day EMA, with 145.00 as the next key support.
Bullish Case: Weaker spending, dovish BoJ tone, or hawkish Fed signals may lift USD/JPY toward the 200-day EMA and potentially 149.35 resistance.

The daily chart suggests short-term bullish momentum, but direction hinges on upcoming economic data and Fed commentary later today.

🇦🇺 AUD/USD Outlook: Turnover Data and Fed Commentary Take Center Stage

The Australian Dollar (AUD) remains under pressure after Australia’s business turnover fell 0.1% in June, according to the Australian Bureau of Statistics (ABS). Five sectors, including retail trade and accommodation services, posted declines — a concerning trend for the Reserve Bank of Australia (RBA) as it assesses demand and inflation pressures.

If turnover declines further, it may solidify the case for Q4 rate cuts, especially if linked to falling wage growth and softer labor conditions. Conversely, a positive reading could provide the AUD/USD pair with a bullish catalyst.

📊 AUD/USD Technical Scenarios: Key Levels in Play

Bearish Scenario: Weak Aussie data or dovish RBA rhetoric could send the pair toward the 50-day EMA, exposing the 200-day EMA below.
Bullish Scenario: Strong turnover data or hawkish RBA commentary could drive AUD/USD to the $0.6550 resistance. A sustained break may pave the way to $0.6625, the July high.

📈 Fed Commentary Later Today May Shift Rate Cut Bets

Later in the North American session, comments from Federal Reserve officials could drive volatility across major pairs. If policymakers hint at delaying rate cuts to assess the inflationary impact of recent tariffs, the US Dollar may gain, pressuring both AUD/USD and USD/JPY.

Hawkish Fed Tone: Likely to boost the USD, pressuring AUD/USD lower and lifting USD/JPY higher.
Dovish Signals: Could revive bets on multiple rate cuts, narrowing rate differentials and pushing AUD/USD toward 0.6550.

🧭 Summary: JPY & AUD Direction Hinges on Data and Central Bank Messaging

JPY outlook remains fragile ahead of spending data and amid renewed trade risks with the US.
AUD direction will depend on business turnover results and RBA outlook.
Fed commentary remains the primary catalyst, likely to impact both currency pairs via shifting rate cut expectations.

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Yasher Rizwan