USD/JPY Fundamental Analysis September 21, 2012, Forecast

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Analysis and Recommendation:

The USD/JPY is trading at 78.22, back to the price level it was at before the BoJ meeting and stimulus package announced yesterday. The USD had surged against the weakened yen after the news from the BoJ, but within a short time, markets began to ignore the BoJ statements and the USD weakened.

Although the USD traded up against the euro and its other crosses it continued to decline against the JPY.

The easing should help mitigate some of the upward pressure on JPY that might have occurred as a result of recent developments in relative monetary policy, specifically vs the Fed.  Policymakers have decided to expand the BoJ balance sheet, with asset purchases of ¥10trn that will include both treasury bills and JGBs.  The purchases are part of an expansion to the existing Asset Purchase Program and raise the total to ¥80trn, with expectations of completion by Q4 2013. Traders seem to be at a loss today to explain the unusual behavior of the JPY, which for all reasons should have remained weak.

This morning also Chinese HSBC manufacturing PMI printed at 47.80 showing ongoing contraction, which also should weigh on the JPY.

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 September 20, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sept 20 

 

NZD

 

 

GDP (QoQ) 

0.6%

 

0.3% 

 

1.0% 

   

 

 

JPY

 

 

Trade Balance 

-0.47T

 

-0.37T 

 

-0.37T 

   

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

 

 

47.60 

 

 

 

 

JPY

 

 

All Industries Activity Index (MoM) 

-0.6%

 

-0.5% 

 

0.3% 

   

 

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

(only tier 3 regional data)

Date

Time

 

Currency

 

 

Event

 

Previous

 

 

Sept 21 

07:45

 

NZD

 

 

Visitor Arrivals (MoM) 

 

-3.4% 

 

 

 

09:00

 

AUD

 

 

CB Leading Index (MoM) 

 

0.2% 

 

 

 

12:00

 

NZD

 

 

Credit Card Spending (YoY) 

 

0.1% 

 

 

 

20:30

 

INR

 

 

Indian FX Reserves, USD 

 

292.04B 

 

 

 

20:30

 

INR

 

 

Indian Bank Loan Growth 

 

16.70% 

 

 

 

23:30

 

USD

 

 

ECRI Weekly Annualized (WoW) 

 

2.10% 

 

 

Government Bond Auction

Date Time Country 

Sep 21 15:30 Italy  

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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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