USD/JPY Fundamental Analysis February 7, 2012, Forecast

USD/JPY Fundamental Analysis February 7, 2012, Forecast

No economic events scheduled today in Japan

03:30     AUD       Interest Rate Decision 4.00% 4.25%

 03:30    AUD       RBA Rate Statement     

Reserve Bank of Australia (RBA) board members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the AUD, while a lower than expected rate is negative/bearish for the AUD.                                                                                    

15:00    USD      Fed Chairman Bernanke Testifies

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.  

23:30     AUD       Westpac Consumer Sentiment                                 2.40%   

The Westpac Consumer Sentiment Index measures the change in the level of consumer confidence in economic activity. On the index, a level above 100.0 indicates optimism; below indicates pessimism. The data is compiled from a survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.           

Analysis and Recommendation: (close of Asian session )

USD/JPY was trading 76.67 in a crazy session. The pair were trading down at 76.50 until worries began to surface in the early morning hours in Europe.

 The USD has picked up some tentative strenght on worries about Greece. After committing to have a done deal no later then Sunday night, there is no deal on the table and negotiations and talks continue. The Greek Prime Minister seems to be losing control. Worries continue to grow as the EU steps up pressure to resolve the problems.

Bank of Japan Governor Masaaki Shirakawa said that he acknowledges that the economy is in a severe situation due to deflation and a strong yen, signalling the central bank’s readiness to offer further monetary stimulus if Japan’s fragile economic recovery is threatened.

But Shirakawa pushed off criticism that the BOJ was not easing monetary policy as quickly as the Federal Reserve, stressing that both central banks share similar goals and look not just at price growth but at ensuring sustainable economic growth.

“We acknowledge that the problems Japan faces such as the current deflation and yen strength are very severe,” Shirakawa told an upper house budget committee meeting on Monday. “The BOJ will implement appropriate steps through close examination of the economic situation,” he said.

Scheduled Sovereign Bond Sales

Feb 06  10:10  Norway  Bond auction

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction