EUR/JPY Fundamental Forecast – May 27, 2016

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Published: May 26, 2016, 04:03 UTC

The EUR/JPY dipped 20 points to 122.71 as the yen continued to strengthen as the BoJ refrained from currency intervention to lower the yen. Traders were

EUR/JPY Fundamental Forecast – May 27, 2016

The EUR/JPY dipped 20 points to 122.71 as the yen continued to strengthen as the BoJ refrained from currency intervention to lower the yen. Traders were thinking that the BoJ would wait until after the G7 meeting to step into the markets but seem to have decided against it, which strengthened the yen.

The Japanese yen surged 0.4% for no apparent reason as currency traders try to decipher whether Japan will intervene in the currency market. Some traders pointed to an interview published on The Financial Times today with Masatsugu Asakawa, Japan’s vice minister of finance for international affairs, an influential figure that may also sway the yen. “Mr Asakawa is the senior official in charge of currency policy — and since Japan thinks yen intervention is a legitimate tool of public policy, he has formidable power,” wrote the FT.

Japan’s Finance Minister Taro Aso already told the media that the yen’s trading can be considered disorderly if it moves by 5 yen over two days in either direction; in other words, ground for yen intervention.

Reuter’s said that while Japanese officials have publicly railed against the yen’s rapid appreciation to 18-month highs earlier this month, some economic policymakers have told Reuters they are not so worried that the yen will derail efforts to revive exports and the economy.

In addition to talk of currency intervention, investors have been eager for any developments about the timing of Japan’s sales tax increase.

Japanese Finance Minister Taro Aso said on Wednesday that he told his G7 counterparts at a finance leaders’ meeting last week that Japan will raise the tax as planned. But he did not say whether that meant Japan has officially pledged to the international community that it will go ahead with the increase.

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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Friday, May 27, 2016

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Assist Gov Debelle Speaks
JPY	National Core CPI (YoY) (Apr)		-0.4%	-0.3%
JPY	Tokyo Core CPI (YoY) (May)		-0.4%	-0.3%
USD	GDP (QoQ) (Q1)		0.9%	0.5%
USD	GDP Price Index (QoQ) (Q1)		0.7%	0.7%
USD	Michigan Consumer Expectations		86.6	87.5
USD	Michigan Consumer Sentiment (May)		95.4	95.8
USD	Fed Chair Yellen Speaks
USD	Baker Hughes U.S. Rig Count			318