USD/JPY and AUD/USD Forecast: Yen Pressured by Recession Fears, Aussie Eyes Housing Data and US Jobs Report

The Japanese Yen faces pressure as fresh data reveals household spending in Japan fell by 1.8% in April, well below expectations. This sharp drop fuels concerns about a looming recession, weakening inflation expectations, and reducing the likelihood of a Bank of Japan (BoJ) rate hike in 2025.

Japan’s Q1 GDP already contracted by 0.2%, with weak private consumption and falling exports playing a central role. Since consumer spending makes up more than half of Japan’s GDP, these figures are critical. As a result, the USD/JPY pair climbed higher, reflecting a bearish outlook for the Yen.

Key USD/JPY Drivers:

• 📉 Japan’s April household spending: -1.8% vs. expected -0.8%
• 📉 Q1 GDP contraction: -0.2%
• 🏦 BoJ remains cautious on rate hikes due to weak consumption and external demand
• 🌐 Trade tensions could revive safe-haven demand for Yen

What’s Next for USD/JPY?

The focus now shifts to the US Nonfarm Payrolls (NFP) report. Forecasts suggest a slowdown in job growth (130K vs. 177K previously) and steady unemployment at 4.2%. If confirmed, this could strengthen bets on a Fed rate cut in Q3, pushing USD/JPY lower toward 142.36 support.
Conversely, stronger data may fuel hawkish Fed speculation, lifting the pair toward 145.00.

📊 USD/JPY Chart Outlook:

• Bearish below 142.36 on weak US data or trade risk
• Bullish above 145.00 on strong NFP or dovish BoJ cues

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AUD/USD Forecast: Housing Sector and US Data in Focus

The Australian Dollar trades cautiously as traders await fresh housing data and the US labor market report. Preliminary data shows a 3.1% rise in Australian housing approvals for April, a potential bullish signal if building permits follow suit.

However, building permits dropped 5.7% in April, raising concerns about housing supply. If approvals continue rising, the Reserve Bank of Australia (RBA) may lean dovish, keeping AUD/USD under pressure.

Key AUD/USD Drivers:

• 📈 Housing approvals up 3.1% in April
• 📉 Building permits down 5.7%
• 💡 More housing supply could tame inflation, reduce rate hike pressure
• 📊 Rate-sensitive sectors watch US Fed and RBA commentary

What’s Next for AUD/USD?

If Friday’s NFP data comes in softer than expected, the Fed may appear more likely to cut rates, narrowing the rate gap between the US and Australia. This scenario could push AUD/USD toward 0.6550–0.6600.
However, strong US data could send the pair back below 0.6450, especially if RBA signals dovish intent.

📊 AUD/USD Chart Outlook:

• Bearish below 0.6450 with soft Aussie data or hawkish Fed
• Bullish above 0.6550 on weaker NFP and hawkish RBA signals

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🔍 Summary: Key Events to Watch

Pair	Key Driver(s)
USD/JPY	Japan recession fears, BoJ outlook, US jobs data, Fed policy signals
AUD/USD	Aussie housing approvals, US labor data, interest rate differentials, RBA tone

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