Status "Return to Sender"

Our parcel, sent from Osaka has the status "return to sender". However, we have flown back to Australia and are no longer in Japan. Could you please confirm what is happening and where the parcel will be re-directed to?

You can't ask anonymous internet users like us to "confirm" anything about your parcel. Did you send it from a post office in Japan (instead of other delivery services)? If so, you need to ask Japan Post. All we can do is to guess.

https://www.post.japanpost.jp/question/index_en.html

Sounds like it is being sent back to the sender.

If it was left at the post office for too long without pick up. Then the post office will return it.

Best to ask the post office.

A delivery failure notice will hold the item for seven days for pick-up or re-delivery. If you are back in Australia, the item will be returned to the person/organisation that sent it to you.
You need to get in touch (if possible) with the sending person/organisation and arrange international shipping.

From the original question, I had the impression that the "sender" is the OP themselves and that they no longer are at the sender's address written on the parcel. In any case, the OP can contact Japan Post or whatever delivery service they used.

Is what you sent food?
I have sent food to Australia, but there was an error at the plant quarantine and the package was returned.
The sender will probably be the place you sent it when you were in Japan.