AUD/JPY Eases Despite Aussie Jobs as Yen Firms on Fears

Key Moments

Australian Dollar Slips Against Yen After Labor Data

The AUD/JPY cross is facing renewed selling pressure following the latest Australian labor market report, pushing the pair closer to the multi-week low reached in late April. Spot prices are currently trading just under the mid-111.00s, a decline of around 0.20% on the day, and remain vulnerable after pulling back from the key 115.00 level, which marked the highest point since 2007 earlier this month.

Fresh figures from the Australian Bureau of Statistics (ABS) showed that the Unemployment Rate eased to 4.4% in May from 4.5% previously, in line with expectations. The number of employed people increased by 40.3K, surpassing the consensus estimate of a 25K gain. However, the prior month’s employment figure was revised lower, indicating that the economy actually lost 40.7K jobs. Combined with Wednesday’s mixed Australian consumer inflation data and a generally cautious risk backdrop, the release is weighing on the risk-sensitive Australian Dollar and pressuring AUD/JPY.

Intervention Talk and BoJ Tone Support the Yen

The Japanese Yen is drawing additional support from heightened speculation that US and Japanese authorities could act jointly in currency markets, adding to the downside bias in AUD/JPY. Japan’s Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent agreed to take action on currencies if needed. In addition, Japan’s Chief Cabinet Secretary Minoru Kihara stated on Tuesday that he will take appropriate action against foreign exchange moves if required. These signals, combined with a hawkish tilt at the Bank of Japan (BoJ), are helping to underpin the JPY.

Minutes from the BoJ’s April meeting released last week showed that some board members favored a quicker pace of rate hikes to prevent underlying inflation from overshooting. The Summary of Opinions from the June meeting further indicated that policymakers discussed rising inflation risks, with some advocating faster rate increases to bring borrowing costs closer to a neutral level for the economy. BoJ board member Naoki Tamura added earlier today that it is important to move the policy rate toward the neutral level, which he put at about 2%.

Rate Differentials and Technical Picture for AUD/JPY

Despite the recent Yen-friendly developments, Japan’s interest rates remain below those of several peers, including Australia. Market pricing still reflects expectations of about 15 basis points of additional tightening by the Reserve Bank of Australia (RBA) over the remainder of the year. This rate differential may discourage market participants from implementing aggressive bearish positions in AUD/JPY and could help slow or limit further downside in the cross.

Even so, the AUD/JPY pair has broken below its 100-day Simple Moving Average this week for the first time since June 2025. That technical move suggests that, at least for now, the prevailing directional bias in spot prices is skewed toward further weakness.

Australian Employment Change Snapshot

The Employment Change s.a. indicator, released by the Australian Bureau of Statistics, tracks the monthly change in the number of employed people in Australia, adjusted for seasonal factors. A rising Employment Change reading is generally associated with stronger consumer spending and economic growth, and is typically viewed as supportive for the Australian Dollar. Conversely, a weak reading is considered negative for the currency.