USD/JPY and AUD/USD Outlook: Trade Tariffs, BoJ Caution, and China Data Shape Next Moves

The Japanese Yen (JPY) and Australian Dollar (AUD) are in focus as trade tensions, central bank policies, and Chinese economic data drive volatility in the forex market.

USD/JPY Forecast: BoJ Hike Uncertainty Grows as Tariff Risks Rise

The USD/JPY pair remains sensitive to evolving U.S.-Japan trade negotiations, especially after President Trump announced a 25% tariff on Japanese goods effective August 1. The news casts fresh doubts over the Bank of Japan’s (BoJ) ability to hike interest rates in 2025.

Upcoming Japanese machinery orders data (due July 14) will be key. Analysts expect a 1.5% drop in May following April’s steep 9.1% decline. A deeper contraction could signal worsening business sentiment, further dimming BoJ’s rate hike prospects and weakening the Yen.

Trade-related uncertainty has already weighed on Japan’s export-heavy industries. If no trade resolution is reached, it could close the door on any BoJ tightening this year, potentially driving USD/JPY back toward the 148.00 resistance zone.

USD/JPY Technical Outlook

• Bullish Case: Stalled trade talks and a hawkish Fed could lift the pair toward the 200-day EMA near 148.00.
• Bearish Case: Positive Japan data or dovish Fed remarks may push USD/JPY lower toward 145.00 support and the 50-day EMA.

Traders are also watching Fed speakers today for clues on U.S. rate policy. The likelihood of a September rate cut dropped to 60.4% (from 68.1%) after Trump’s tariff moves. If Fed officials lean hawkish, USD strength could resume.

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AUD/USD Forecast: China Trade Data and RBA Policy Under Scrutiny

The Australian Dollar could see heightened volatility as markets await China’s June trade report. Forecasts suggest exports rose 5% YoY and imports grew 1.3%, up from May’s declines.

Stronger Chinese demand would benefit Australia, which sends over one-third of its exports to China. However, weak data could reignite expectations of an RBA rate cut in August, pressuring the AUD.

RBA Governor Michele Bullock recently reiterated the importance of China’s economy and stimulus policy. While Australia avoided direct tariffs from the U.S., indirect risks via trade partners remain elevated.

AUD/USD Technical Outlook

• Bullish Case: Positive China trade data and dovish Fed tone could lift AUD/USD toward the $0.66 level.
• Bearish Case: Disappointing Chinese data or Fed hawkishness may push the pair back to the $0.65 support zone.

With Australia’s 50%+ trade-to-GDP ratio, Beijing’s next move on stimulus or trade policy could significantly influence the Aussie dollar’s direction.

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What to Watch Today:

• USD/JPY: Japanese machinery orders, BoJ comments, and U.S.-Japan trade news.
• AUD/USD: Chinese trade data, US-China trade headlines, and potential Beijing stimulus.
• Both Pairs: Market reaction to Fed commentary, which could shape global rate expectations.

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