USD/JPY Fundamental Analysis – week of August 29, 2016 – Forecast

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Updated: Aug 27, 2016, 05:10 UTC

The USD/JPY closed the week at 101.4 rescued by the soaring dollar after comments from Janet Yellen and Stanley Fischer sent the dollar stronger. The pair

USD/JPY Fundamental Analysis – week of August 29, 2016 – Forecast

The USD/JPY closed the week at 101.4 rescued by the soaring dollar after comments from Janet Yellen and Stanley Fischer sent the dollar stronger. The pair are a strong sell moving into the new week after the pair gained 1.18% for the week. After first-quarter earnings in Japan wrapped up this month with the steepest plunge since 2011, the prospect for an increase in annual profits is about to get even dimmer.

Expect a round of corporate earnings downgrades in September, said Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities. Trends that slammed profit in the first quarter — a stronger yen, negative interest rates and slumping China growth — haven’t reversed. At stake is a second straight year of earnings decline that could bury Prime Minister Shinzo Abe’s push for companies to boost capital spending and raise wages to spur economic growth.

The Japanese yen has been a star performer in 2016, and after a 20 percent move in less than eight months, everyone is wondering where this currency goes next. It’s a question being asked far beyond foreign exchange desks.

A stronger yen is helping some American multinational companies, including technology players like HP Inc. and automakers like General Motors that have complained in the past about a weaker yen giving a lift to their Japanese competitors’ exports and an unfair competitive advantage.

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Week beginning August 29, 2016

Date	Country	Name	Volatility	Previous	Consensus
8/31/2016	EUR	Unemployment Rate	3	6.1	6.1
8/31/2016	EUR	Unemployment Change	3	-7	-4
8/31/2016	EUR	Consumer Price Index – Core	3	0.9
8/31/2016	EUR	Consumer Price Index (YoY)	3	0.2	0.3
9/1/2016	USD	ISM Manufacturing PMI	3	52.6	52.4
9/1/2016	USD	ISM Prices Paid	3	55
9/2/2016	USD	Unemployment Rate	3	4.9	4.8
9/2/2016	USD	Nonfarm Payrolls	3	255	164