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EUR/JPY Fundamental Forecast – May 23, 2016

By:
Barry Norman
Published: May 20, 2016, 04:18 UTC

The EUR/JPY is up 4 points to 123.23 as the euro recovered a bit of its momentum.  The euro bounced off recent lows as traders took advantage of this

EUR/JPY Fundamental Forecast – May 23, 2016

The EUR/JPY is up 4 points to 123.23 as the euro recovered a bit of its momentum.  The euro bounced off recent lows as traders took advantage of this week’s declines. The Japanese yen remains weak focused on comments about intervention and the G7 meeting today and tomorrow.  Finance ministers and central bankers from the G7 kick off meetings in Japan on Friday as they look to breathe life into the wheezing global economy.

Host Japan is keen to win an endorsement for its position that fiscal stimulus is the way to kick start the world economy, after a rally in the yen hit exporters and accelerates a slowdown at home. But Tokyo’s threat of a market intervention to reverse the rise could put it on a collision course with other G7 nations, including the United States and Germany which have ruled out such moves.

French Finance Minister Michel Sapin also waved off the idea of countries gaining a trade advantage by manipulating their own currencies.

“Today we are in a cooperation phase, and not in an intervention or a currency war phase,” he told AFP on the eve of the meetings. The G7 group — also including members from Britain, Canada, and Italy — will try to hammer out a strategy for keeping a global recession at bay.

In April, the International Monetary Fund cut its forecast for world growth for the third time in less than a year, as a slowdown in China and other emerging economies raised fears that the worst was yet to come.

Among those attending the talks this week are US Treasury Secretary Jacob Lew, European Central Bank president Mario Draghi, and IMF chief Christine Lagarde.

Analysts said that investors are closely focused on a meeting of Group of Seven finance leaders in Japan starting on Friday, which is likely to take up currencies as a topic.

“Investors are careful about taking positions as they expect that discussions will not be favorable for a weaker yen,” said Takuya Takahashi, a strategist at Daiwa Securities.

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.

eurjpy

Upcoming Economic Events that you should be monitoring:

Monday, May 23, 2016

Cur. Event Actual Forecast Previous  
  Canada – Victoria Day
  JPY Exports (YoY) (Apr)     -6.8%  
  JPY Trade Balance (Apr)     755B  
  EUR Manufacturing PMI (May)   51.9 51.7  
  EUR Markit Composite PMI (May)   53.2 53.0  
  EUR Services PMI (May)   53.2 53.1

Government Bond Auctions

Date Time       Country           Auction

May 23 N/A UK Syndicated tap of 0.125% I/L 2046 Gilt

May 23 11:03 Sweden Sek 1.25bn 0.125% Jun 2019 I/L bond

May 23 11:30 Germany Eur 1.5bn May 2017 Bubill

May 23 12:00 Norway Details of bond auction on May 25

May 23 17:20 Italy Details of Zero‐coupon/BTP€i auction

May 25 11:03 Sweden Holds bond auction

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero‐coupon/BTP€i auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

 

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