USD/JPY Fundamental Analysis September 21, 2012, Forecast

Posted September 20, 2012 5:22 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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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

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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