EUR/JPY Fundamental Forecast – April 28, 2016

The EUR/JPY was last trading at 125.571, down 0.207 or -0.16% as investors squared positions ahead of Thursday’s Bank of Japan monetary policy decision.

Many of the major market players expect the BoJ to take some form of easing measures, including an increase in the purchases of stocks and a cut in interest rates.

Reuters said last week that the BoJ is considering expanding its negative rate policy to bank loans and cut rates further. In January, the central bank implemented a policy of negative interest rates.

According to Bloomberg, the BoJ could consider new steps if policymakers decide to lower the negative 0.1 percent interest rate applied to some bank reserves parked with the central bank.

Much of the recent rally from 121.709 on April 18 to yesterday’s high at 125.968 has been technically driven. Going into the release of the BoJ decision, there is upside momentum which suggests traders are expecting stimulus from the central bank. Traders have to be cautious as the market nears the key 127.173 area because we could be looking at a “buy the rumor, sell the fact” situation if the central bank delivers exactly what the bullish investors have been expecting.

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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Upcoming Economic Events that you should be monitoring:

Thursday, April 28, 2016

Government Bond Auctions

Date Time       Country           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