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EUR/JPY Fundamental Forecast – July 26, 2016

By:
Barry Norman
Published: Jul 25, 2016, 03:28 UTC

The EUR/JPY gained 28 points to trade at 116.78 while the euro continued to ease and the yen drifted off of its safe haven perch. Traders data this

EUR/JPY Fundamental Forecast – July 26, 2016

The EUR/JPY gained 28 points to trade at 116.78 while the euro continued to ease and the yen drifted off of its safe haven perch. Traders data this morning was supportive of the Japanese yen and the domestic economy.

The Japanese government retained on Monday its assessment that the domestic economy is recovering moderately but adopted a weaker view on corporate sentiment due to a firming yen and Britain’s vote to leave the European Union.

The Cabinet Office said in its report for the fifth straight month that the economy is experiencing “a moderate recovery, while weakness can be seen recently,” as consumer spending continues to lack strength but income and employment conditions are improving.

Reflecting adverse effects of the yen’s appreciation that tends to reduce profits of exporters, “firms’ judgment on current business conditions shows cautiousness further,” the office said. In June, the government said business sentiment showed cautiousness.

In addition to the stronger yen, the “Brexit” vote last month also increased uncertainty for long-term prospects for companies, as Britain’s exit from the European Union could lead to postponement in capital investment in the country, a Cabinet Office official said.

Japanese trade data for June has beaten expectations for June, although in year-on-year terms the value of both imports and exports continued to contract.

According to the Ministry of Finance, the value of imports fell by 18.8% compared to the levels of a year earlier. Although ahead of forecasts for a larger drop of 19.7%, the decline was steeper than the 13.8% drop registered in the year to May.

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Upcoming Economic Events that you should be monitoring:

Tuesday, July 26, 2016

Country Name Volatility Previous
NZD Imports 2 4.22
NZD Exports 2 4.57
NZD Trade Balance (YoY) 2 -3.633
NZD Trade Balance (MoM) 2 358
GBP Inflation Report Hearings 3
USD S&P/Case-Shiller Home Price 2 5.4
USD Markit Services PMI 2 51.4
USD Markit PMI Composite 2 51.2
USD Consumer Confidence 2 98
USD New Home Sales Change (MoM) 2 -6
USD New Home Sales (MoM) 2 0.551

Government Bond Auctions

Date/Time Country Type

Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill

Jul 25 17:20 Italy Announces details of bond auction

Jul 26 11:10 Italy Holds zero-coupon/BTP€i auction

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

Jul 28 11:10 Italy Holds bond auction

 

 

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