AUD Drops on Soft Jobs Data; Yen Gains on BOJ Signals

Key Moments

AUD/JPY Under Pressure After Weak Australian Labor Report

AUD/JPY continues to move lower for a second consecutive session, trading near 109.60 during Asian hours on Thursday. The cross remains on the back foot as the Australian Dollar (AUD) weakens in response to disappointing domestic labor market figures.

Data from the Australian Bureau of Statistics (ABS) showed that the Unemployment Rate remained at 4.7% in September, above the market consensus of 4.6%. Employment Change recorded a sharp decline of 39,300 jobs, reversing a 39,500 increase in August and undershooting expectations for a 20,000 rise. The Participation Rate also slipped to 66.8% from a revised 67.0% in August.

Beneath the headline numbers, full-time positions increased by 34,400, rebounding from an earlier 6,300 drop, while part-time employment fell by 73,700 following a previous 45.8K gain. According to Sean Crick, head of labor statistics at the ABS, a larger share of people remained unemployed in September compared with recent years. He also noted that part-time hours worked declined by 1.5%, whereas full-time hours worked rose by 0.4%.

Yen Supported by Intervention Talk and BoJ Outlook

The Japanese Yen has drawn additional support against major currencies from persistent speculation that Japanese authorities may step in to stabilize the currency. At the same time, reports indicate that Bank of Japan (BoJ) policymakers are inclined to avoid a consecutive rate hike at their October meeting. Instead, they are expected to take time to assess the cumulative impact of earlier tightening measures against a backdrop of soft consumption and muted services inflation.

Koeda’s Hawkish Tone Reinforces Normalization Bias

Koeda’s speech score of 8.2/10 on FXS Speechtracker matches the historic average, signaling a consistently hawkish stance rather than a new inflection point. The emphasis on upside price risks from YEN depreciation, robust global AI demand, and the Middle East situation, alongside comments that neutral rates are well above 1 percent and that financial conditions remain accommodative, reinforces a bias toward further rate hikes and balance-sheet normalization.

Koeda’s view that recent rate hikes are not expected to curb consumption, that companies’ financing conditions remain favorable, and that underlying inflation is anchored around 2% with steady wage gains supports a narrative of sustained inflation pressure. The explicit remark that the BOJ should not be too cautious about raising policy interest rates and should continue calmly with normalization of its balance sheet is clearly hawkish, suggesting upside risks for the YEN and a potential steepening of JGB yields as markets price a more assertive policy path.

Australian Employment Change – Latest Release Snapshot

The Employment Change statistic from the Australian Bureau of Statistics tracks monthly shifts in the number of employed individuals, adjusted for seasonal patterns. Strong readings are generally associated with robust consumer demand and positive economic momentum, often supporting the Australian Dollar. Weaker outcomes are typically viewed as negative for the currency.