EUR/JPY Fundamental Forecast – May 9, 2016

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Published: May 6, 2016, 03:08 UTC

The EUR/JPY dipped 15 points to 122.18 on a quiet trading morning with Japanese markets are on holiday. The euro rallied after Eurozone Services PMI

EUR/JPY Fundamental Forecast – May 9, 2016

The EUR/JPY dipped 15 points to 122.18 on a quiet trading morning with Japanese markets are on holiday. The euro rallied after Eurozone Services PMI reports were released, and the numbers were positive. German Final Services PMI improved to 54.5 points, easily beating the estimate of 50.5 points. Although this figure was slightly below the previous month, it points to expansion in the services sector. Eurozone Final Services PMI was unchanged at 53.1 points, within expectations. At the same time, retail sales, the primary gauge of consumer spending, is hurting. Eurozone Retail Sales declined 0.5%, surprising the markets which had expected a 0.1% gain. Last week, German Retail Sales also dropped, coming in at -1.1%.

Japan has been on holiday most of this week so trading volumes have been lower. For a third consecutive day, the Japanese Yen continued to weaken, however it is trading very near to an 18-month high. FX traders remain unconvinced that the Bank of Japan is on the verge of intervening in the Yen’s rise, despite recent rhetoric to the contrary. In the past 6 months, the Yen has risen more than 15%.

Japanese authorities have said they could step into the currency market to halt the yen’s rise if needed, but investors are skeptical as to whether such intervention would have a lasting impact.

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.