EUR/JPY Fundamental Forecast – April 27, 2016

The EUR/JPY dipped 25 points to 125.06 as the yen continued to gain ahead of Thursday’s BOJ meeting.  According to Reuters the BOJ could announce further stimulus measures to halt then yen’s strength Thursday, skepticism about the central bank’s power to weaken the yen contributed to the yen’s gains against the dollar on Monday, said Alfonso Esparza, senior currency strategist at Oanda in Toronto.

“The BOJ really have a very limited runway,” Esparza said.

The euro rebounded against the dollar, hitting a session high of $1.1267 after hitting a nearly four-week low of $1.1213 earlier Monday. Esparza said expectations that the Fed would take a dovish stance in a policy statement Wednesday hurt the dollar.

The Financial Review said that officials at the Bank of Japan (BoJ) will desperately hoping to avoid roiling markets when they unveil their latest monetary policy decisions on Thursday.

The BoJ is under intense pressure to ease monetary policy further as the surging yen has eroded the competitiveness of Japanese exporters, and made it even less likely that the Japanese central bank will meet its 2 per cent inflation target.

As a result, many analysts are tipping the Bank of Japan will increase its monetary stimulus, either by pushing its key deposit rate deeper into negative territory, or by stepping up its already-gigantic, bond-buying program.

Whatever the decision, investors will be hoping that Japanese central bank avoids a repeat of events in January, BoJ’s surprise move to adopt negative interest rates triggered a strong rally in the yen – exactly the opposite outcome to what Japanese policy-makers had been hoping for.

FxEmpire provides in-depth analysis for each asset 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 up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Wednesday, April 27, 2016

Government Bond Auctions

Date Time       Country           Auction

Apr 26 11:10 Italy Holds BTP€i auction

Apr 26 19:00 US Holds 2-year note auction

Apr 27 11:03 Sweden Holds bond auction

Apr 27 11:10 Italy Holds CTZ auction

Apr 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Apr 27 19:00 US 2-year FRN, 5-year note auctions

Apr 28 11:10 Italy Holds 5yr/10yr bond auctions

Apr 28 19:00 US Holds 7-year note auction