USD/JPY Fundamental Analysis – December 2, 2015 – Forecast

Analysis and Recommendation:

The USD/JPY responded to a speech by BoJ Governor Kudora who has been vocal lately. The yen gained 24 points as the US dollar eased but found more support in the BoJ speech as well as Chinese data which on the whole was balanced this morning. The USDJPY is trading at 122.87 towards the upper trading range of late. According to the final Caixin/Markit China Manufacturing Purchasing Managers Index, China’s manufacturing activity contracted for the ninth straight month in November, but more slowly than in October. The official purchasing managers index fell to 49.6 in November, the National Bureau of Statistics said Tuesday — the lowest level since August 2012.

Bank of Japan Kuroda has repeatedly said that quantitative easing is having the intended effects, while he reiterated that wages must also rise to spur a revival in Japan’s economy. Base pay rose eight of the nine months through September.

More analysts now say the central bank is finished expanding stimulus, even as they are almost unanimous in predicting 2 percent inflation won’t be reached by the target time frame, which policy makers extended for a second time this year on Oct. 30, to the six months from October 2016 to March 2017. The core CPI measures, excluding fresh food and the effect of the consumption tax increase in April 2014, and the BOJ’s core-core index, which strips out both fresh food and energy, have diverged since the start of this year. In December, both were at 0.5 percent.

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Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, December 2, 2015

Government Bond Auctions

Date Time Country

Dec 02 11:30 UK Gbp 3.75bn 1.5% Jan 2021 Gilt

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain 1.15% Jul 2020 Bono

Dec 03 10:50 France

Dec 03 11:03 Sweden Sek 0.7bn 1%

Dec 07 13:00 Norway Details bond auction on 09 Dec

Dec 07 17:30 Italy Announces details of BTP/CCTeu on 11 Dec

Dec 08 11:30 UK 3.5% 2045 Gilt auction

Dec 08 19:00 US Holds 3-year note auction

Dec 09 11:03 Sweden Holds bond auction

Dec 09 11:05 Norway Holds bond auction

Dec 09 11:30 Germany Eur 3bn Dec 2017 Schatz

Dec 09 19:00 US Holds 10-year note auction

Dec 10 19:00 US Holds 30-year bond auction

Dec 11 11:10 Italy Auctions BTPs/CCTeus