Japanese Yen and Aussie Dollar Forecasts: China Trade and the Fed in Focus

Japan Household Spending Spotlights the BoJ

Japan’s household spending report underscored consumer sentiment amid US tariffs and a shifting economic backdrop, spotlighting USD/JPY and the Bank of Japan. Household spending rose unexpectedly by 2.1% year-on-year in March after falling 0.5% in February. Economists forecast a 0.5% decline.

The rebound could fuel demand-driven inflation. As private consumption accounts for around 60% of Japan’s GDP, stronger spending may also bolster the economy. These factors would support a more hawkish BoJ rate path, driving demand for the Yen.

Beyond the March data, trade developments remain crucial for USD/JPY trends. Progress toward trade deals would temper demand for safe-haven assets such as the Yen, while rising tensions may fuel Yen appetite.

Key Scenarios to Watch

• Bullish Yen Scenario: Rising trade tensions or hawkish BoJ guidance may push USD/JPY lower toward 142.5.
• Bearish Yen Scenario: De-escalating trade tensions or a dovish BoJ stance could send the pair above the 50-day EMA toward the April 10 high of 147.714.

USD/JPY Daily Outlook: Focus Shifts to the Fed

During the US session, FOMC members’ speeches will influence US dollar demand after Fed Chair Powell’s wait-and-see press conference. Calls to delay Fed rate cuts to monitor trade developments and price trends may fuel US dollar demand, sending USD/JPY above the 50-day EMA toward 147.714. Conversely, support for rate cuts to bolster the US economy may weaken appetite for the US dollar, dragging USD/JPY toward 142.5.

Don’t miss today’s full USD/JPY forecast with chart setups and trade ideas.

AUD/USD in Focus: China Trade in Focus

Meanwhile, China’s trade data will influence AUD/USD trends ahead of upcoming US-China trade talks. Economists expect exports to rise 1.9% year-on-year in April, down from a 12.4% surge in March. Imports are forecast to fall 5.9% (March: -4.3%).

Softer import and export readings would reflect the impact of US tariffs on global demand and domestic consumption, impacting the Aussie dollar. China accounts for one-third of Aussie exports. With a trade-to-GDP ratio above 50%, weaker demand may impact the Aussie economy, supporting a more dovish RBA stance.

Conversely, an unexpected rise in imports and exports may drive Aussie dollar demand.

While data remains critical, trade developments will continue influencing AUD/USD trends. Progress toward a US-China trade deal could shift market focus to central bank policy signals.

AUD/USD: Key Scenarios to Watch

• Bearish Aussie dollar Scenario: An escalation in the US-China trade war or dovish RBA signals may send AUD/USD below the $0.63623 support level toward the 50-day EMA.
• Bullish Aussie dollar Scenario: Progress toward a US-China trade deal, Beijing stimulus, or hawkish RBA rhetoric could drive the pair above the 200-day EMA toward the $0.65 mark.

Click here for a more comprehensive analysis of AUD/USD trends and trade data insights.

Aussie Dollar Daily Outlook: Will Fed Speakers Echo Powell?

Later today, FOMC members may influence US-Aussie rate differentials. Hawkish chatter supporting a near-term hold on interest rates could widen the rate differential, sending the AUD/USD toward the 0.63623 support level. A drop below $0.63623 may enable the bears to target the 50-day EMA.

On the other hand, calls for Fed rate cuts to support the US economy may narrow the rate differential. A more dovish Fed could drive AUD/USD above the 200-day EMA toward $0.65.

Key Market Drivers to Watch Today:

• USD/JPY: Japan trade developments and BoJ commentary.
• USD/JPY and AUD/USD: Fed forward guidance and global trade headlines.
• AUD/USD: China trade data, RBA rhetoric, and China stimulus chatter.

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