AUD/JPY softens to near 94.00 amid risk-off sentiment

• AUD/JPY weakens to near 94.00 in Thursday's Asian session.
• Australian Unemployment Rate steadied at 4.1% in May, as expected. 
• Risk-off sentiment amid escalating Middle East tensions boosts the Japanese Yen. 

The AUD/JPY cross attracts some sellers to around 94.00 during the Asian trading hours on Friday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) amid the rising geopolitical tensions in the Middle East. Traders will keep an eye on Japan's May National Consumer Price Index (CPI) data and Bank of Japan (BoJ) Monetary Policy Meeting Minutes, which are due later on Friday. 

Data released by the Australian Bureau of Statistics (ABS) on Thursday revealed that the country's Unemployment Rate steadied at 4.1% in May, in line with the market consensus. Meanwhile, the Employment Change came in at -2.5K in May versus 87.6K prior (revised from 89K), compared with the consensus of 25K.

The Australian employment data fails to boost the Aussie as traders closely monitor the developments surrounding Israel-Iran tensions. The fear that direct US involvement would widen the conflict boosts the safe-haven flows, supporting the Japanese Yen.

Bloomberg reported early Thursday, citing unnamed sources, that "US officials prepare for possible Iran strike in coming days." Late Tuesday, US President Trump said that he approved of attack plans for Iran but held them to see if Tehran would abandon its nuclear program. Trump emphasized his insistence on Iran's unconditional surrender, but Iranian Supreme Leader Ayatollah Ali Khamenei rejected the US demand.

On the other hand, reduced bets for the Bank of Japan (BoJ) this year might weigh on the JPY and create a tailwind for AUD/JPY. The BoJ's cautious approach to unwinding its decade-long monetary stimulus has prompted traders to push back their expectations about the likely timing of the next interest rate hike to the first quarter of 2026.