USD/JPY Fundamental Analysis October 8, 2012 Forecast

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Analysis and Recommendation:

The USD/JPY is currently trading at 78.38 with little action after the BoJ held rates and policy this morning. Markets were truly surprised. The bank, which had last month increased the size of its asset purchases by 10 trillion yen ($127 billion) to ¥80 trillion, said at the end of a two-day meeting that it will ease policy “in a continuous manner by steadily increasing the amount outstanding” of its quantitative stimulus.  It also kept its benchmark interest-rate target in the 0 to 0.1% range, in line with its previous pledge to hold rates steady until it sees price stability. The decisions were taken unanimously.

“Japan’s economy is expected to level off more or less for the time being, and thereafter, it will return to a moderate recovery path as domestic demand remains resilient and overseas economies gradually emerge from the deceleration phase,” the central bank said in its statement.

The Bank of Japan also said it expects consumer-price inflation to remain at zero “for the time being,” despite mounting pressure to do more to create inflation.

The central bank had been under political pressure to loosen its monetary controls coming into this meeting.

FxEmpire provides in-depth analysis for each currency and commodity 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.

Economic Data October 7, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

Forecast

Previous

Oct. 05

 

AUD

 

 

AIG Construction Index 

30.9

 

32.2 

 

 

TWD

 

 

Taiwanese CPI (YoY) 

2.96%

2.80% 

3.43% 

 

 

PHP

 

 

Philippines CPI (MoM) 

-0.10%

 

0.80% 

 

 

JPY

 

 

Interest Rate Decision 

0.10%

0.10% 

0.10% 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Date

Time

Currency

Event

Previous

Oct. 08

22:00

NZD

NZIER Business Confidence 

-4 

Government Bond Auction

Date Time Country 

Oct 08 09:10 Norway 

Oct 08 15:30 Italy  

Oct 09 08:30 Holland 

Oct 09 09:30 UK 

Oct 09 14:30 UK 

Oct 09 17:00 US 

Oct 10 09:10 Italy  

Oct 10 09:10 Sweden 

Oct 10 09:30 Germany 

Oct 10 09:30 Swiss 

Oct 10 14:30 Sweden 

Oct 10 17:00 US 

 

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About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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