AUD/JPY Pulls Back Near 94.50 as Japanese Business Sentiment Beats Forecasts

AUD/JPY Finds Resistance Near 94.50 on Upbeat Japan Tankan Survey

The AUD/JPY currency pair edged lower toward 94.50 during Tuesday's Asian session after Japan's Tankan Large Manufacturing Index came in stronger than expected for Q2 2025. The improving business sentiment gave the Japanese Yen (JPY) a modest boost, triggering some selling in the cross.

Key Drivers:

• Tankan Large Manufacturing Index (Q2 2025):
  • Actual: 13.0 (vs. expected 10.0, previous 12.0)
• Manufacturing Outlook:
  • Held steady at 12.0, above the 9.0 forecast

The data points to a resilient manufacturing sector in Japan, temporarily supporting the Yen despite long-term pressures from US trade tariffs and a cautious Bank of Japan (BoJ) rate outlook.

Upcoming Catalysts for AUD/JPY

Investors now shift focus to:

• China’s June Caixin Manufacturing PMI (due Tuesday)
• Australia’s Retail Sales for May (due Wednesday)

These events are likely to influence Aussie Dollar demand and short-term direction for AUD/JPY.

BoJ Policy Outlook: Rate Hike Unlikely Before 2026

Despite improving domestic indicators, analysts warn that US trade tariffs may slow Japan’s export momentum later in the year. Most economists polled by Reuters forecast the next 25 bps BoJ rate hike in early 2026, limiting further JPY upside in the near term.

Explore More on Tredu.com

• What the Tankan Survey Means for Forex Traders
• How Japan’s Monetary Policy Affects JPY Pairs
• Trading AUD/JPY: A Cross Influenced by Asia-Pacific Trends