The EUR/JPY dipped 21 points as the yen gained momentum in the morning session after the US condemned Japan at the G7 summit and warned against currency
The EUR/JPY dipped 21 points as the yen gained momentum in the morning session after the US condemned Japan at the G7 summit and warned against currency intervention. The pair is trading at 123.42. Japan’s exports fell for a seventh consecutive month in April as the yen strengthened. Overseas shipments declined 10.1 percent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 percent drop. Imports slumped 23.3 percent, leaving a trade surplus of 823.5 billion yen ($7.5 billion).
“Additional balance surplus will of course act to put downward pressure on the yen in the future,” said Ishigane. “Some may have been disappointed by the G-7 results as well.”
The decline was likely exaggerated by a drop in U.S.-bound car exports due to supply-chain disruptions caused by last month’s earthquakes in southern Japan, but a rising yen and weak global demand are clouding the outlook for the year.
“Drops in U.S.-bound car exports were noise,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Asia and the global economy remain weak. On top of that, yen gains squeeze profits at exporters, causing wages and capital spending to weaken, which would hamper ‘Abenomics’ aim of creating virtuous growth,” Minami said.
Concern about the impact of the yen was on show over the weekend as Finance Minister Taro Aso and his U.S. counterpart disagreed over the seriousness of recent moves in the foreign-exchange market.
Comments on the yen’s moves by Aso at Sendai on Friday and Saturday hinted at growing frustration about the impact on exporters, spurring speculation that the finance ministry may intervene. Aso raised the issue in a meeting with U.S. Treasury Secretary Jacob J. Lew.
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Tuesday, May 24, 2016
Cur. | Event | Actual | Forecast | Previous | |||
USD | FOMC Member Harker Speaks | ||||||
AUD | RBA Governor Stevens Speaks | ||||||
EUR | ZEW Economic Sentiment | 23.4 | 21.5 | ||||
EUR | Eurogroup Meetings | ||||||
USD | New Home Sales (MoM) (Apr) | 2.0% | -1.5% | ||||
USD | New Home Sales (Apr) | 523K | 511K |
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