AUD/USD reverses gains as Japan stimulus hopes fade

AUD/USD has reversed earlier gains, falling 0.4% as doubts emerge about Japan's economic stimulus plans, triggering risk-off sentiment across Asian markets. The pair retreated from session highs near 0.6580 to test support at 0.6540, reflecting broader market uncertainty. The reversal coincides with a pullback in equity markets, with the Nasdaq 100 futures declining and the Nikkei 225 giving up early gains. Growing skepticism about the scale and timing of Japan's proposed fiscal measures has dampened risk appetite, benefiting safe-haven currencies like the USD and JPY at the expense of commodity-linked currencies. The Australian dollar faces additional headwinds from concerns about Chinese economic growth and falling iron ore prices. Technical indicators suggest further downside risk for AUD/USD, with immediate support at 0.6520 and resistance at 0.6580. Traders await tomorrow's Australian employment data for potential catalysts.