EUR/JPY Fundamental Analysis – November 25, 2015 – Forecast

Analysis and Recommendations:

The EUR/JPY declined 14 points as the euro continued to weaken ahead of a good deal of German data due later in the session including GDP. Traders are preparing for a massive stimulus plan from the ECB in two weeks as Mario Draghi remains open and talkative about his plans.  The Japanese yen is trading quiet as markets reopen after a Monday holiday.

Economists are virtually unanimous in saying the Bank of Japan monetary authority won’t be able to achieve 2 percent inflation within its target period, even after extending it by six months on Oct. 30 to the period in or around October 2016 to March 2017. An increasing number of analysts also forecast the central bank is done with expanding stimulus.

While workers’ pay grew for seven consecutive months through September, the increase has averaged only about 0.3 percent over that time. BOJ board member Yutaka Harada has said 3 percent wage inflation is required to achieve its price goal.

In September, Prime Minister Shinzo Abe announced that the government’s economic goal is to boost gross domestic product to ¥600 trillion in 2020. Most members of the business community have called this target impossible, since it would require an annual growth rate of 3 percent, and the last time Japan achieved that figure was in 1991.

Japan would have to add ¥110 trillion to its economy to achieve the government’s target, and to do that Japan needs to add several million people to the workforce. Earlier this month a government panel of academics and business leaders recommended that the ruling Liberal Democratic Party accelerate the planned ¥18 yearly increase in the minimum wage.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our  weekly reports and we provide daily updates and outlooks.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November 25, 2015

Government Bond Auctions

Date Time Country

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 11:00 Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 19:00 US 13bn 5-year note

Nov 25 11:03 Sweden Sek 4bn 1% Nov 2026 bond

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 17:30 US Usd 35bn 2-year FRN

Nov 25 19:00 US Usd 29bn 7-year note

Nov 26 11:03 Sweden Sek 5bn 1% Nov 2026 bond exchange

Nov 27 11:03 Sweden 1.5% Nov 2023 bond exchange, 1% Nov 2026 bond exchange

Nov 27 11:10 Italy Auctions BTPs

Nov 27 N/A Spain Announces details of 03 Dec

Nov 30 11:03 Sweden Holds bond auction

Dec 01 11:30 UK 1.5% 2021 Gilt auction

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain Auctions

Dec 03 10:50 France Auctions OATs

Dec 03 11:03 Sweden Holds I/L bond auction

Dec 04 11:03 Sweden Holds I/L bond auction