USD/JPY Fundamental Analysis September 4, 2012 Forecast

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Analysis and Recommendation:

The USD/JPY is trading at 78.28 with the pair falling back into the lower 78 price range where it has spent most of the previous month. US markets are closed today so little activity is expected. On Friday after traders took the time to review Mr. Bernanke’s words, the overall market sentiment was that Mr. Bernanke was setting the stage for the FOMC meeting and decision on September 13th. After stating clearly that the Fed’s were mandated to take action to improve the labor markets, and that immediate action was necessary to help create jobs markets took this as an endorsement.

Mr. Bernanke then went on to list all the tools that the Feds would be using to help support the economic recovery.

After closing at its lowest level in two weeks overnight Friday (78.36), USD/JPY is trading under slight pressure this Monday in Asia on the back of dollar weakness.  The recent yen strength may have caught the attention of the Bank of Japan and Ministry of Finance. The combination of the direct price action, low volatility and the absence of much of a skew in the risk-reversals suggest there is not a compelling case for intervention, though the rhetoric may increase. The BoJ is famous for stealth intervention covered by lots of rhetoric.

With the ECB meeting just a few days away the BoJ will most likely wait until after September 6th. Although the poor HSBC PMI report from China this morning will weigh heavily on the yen.

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 3, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 03

 

KRW

 

 

South Korean CPI (YoY) 

1.2%

 

1.4% 

 

1.5% 

 

 

 

 

KRW

 

 

South Korean CPI (MoM) 

0.4%

 

0.5% 

 

-0.2% 

 

 

 

 

JPY

 

 

Capital Spending 

7.70%

 

8.90% 

 

3.30% 

 

 

 

 

AUD

 

 

Company Gross Operating Profits (QoQ) 

-0.7%

 

1.0% 

 

-3.7% 

  

 

 

AUD

 

 

Retail Sales (MoM) 

-0.8%

 

0.2% 

 

1.2% 

  

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.60

 

 

 

47.80 

  

 

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date

Time

Currency

Event

Forecast

 

Previous

 

 

Sep. 04

05:30

AUD

Interest Rate Decision 

3.50% 

 

3.50% 

 

 

 

15:00

USD

ISM Manufacturing Index 

50.0 

 

49.8 

 

 

Sep. 05

02:30

AUD

GDP (QoQ) 

0.8% 

 

1.3% 

 

 

 

14:00

CAD

Interest Rate Decision 

1.00% 

 

1.00% 

 

 

Sep. 06

02:30

AUD

Employment Change 

5.0K 

 

14.0K 

 

 

 

02:30

AUD

Unemployment Rate 

5.3% 

 

5.2% 

 

 

 

12:00

GBP

Interest Rate Decision 

0.50% 

 

0.50% 

 

 

 

12:45

EUR

Interest Rate Decision 

0.75% 

 

0.75% 

 

 

Sep. 07

15:00

CAD

Ivey PMI 

58.0 

 

62.8 

  

Government Bond Auction

Date  Time  Country 

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

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About:FX Empire Analyst - Barry Norman

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