EUR/JPY Fundamental Forecast – July 19, 2016

The EUR/JPY added 103 points to 116.78 as the yen continued to ease and the euro gained. The yen paid little attention to the attempted coup in Turkey over the weekend while the euro showed little reaction to the horrific terrorist attack in Nice, France. The euro is looking forward to the ECB meeting this week as traders shift to the view that the bank will sit tight taking cues from the BoE.

A stunning electoral victory by Japanese Prime Minister Shinzo Abe’s Liberal Democrats in an important upper-house election over the weekend reinforced the notion that the Bank of Japan will further expand its monetary easing efforts at a policy meeting later this month.

“The market was very long yen as a haven play ahead of the U.K. referendum and the weak U.S. data,” said Kit Juckes, chief currency strategist at Société Générale. “There is a lot of longs getting shaken out very fast.”

Speculation of helicopter money has grown since Prime Minister Shinzo Abe’s ruling coalition won elections over the weekend and were fanned when former Federal Reserve Chairman Ben Bernanke visited the Bank of Japan earlier this week.

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.