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USD/JPY Fundamental Forecast – April 28, 2016

By:
James Hyerczyk
Published: Apr 27, 2016, 05:29 UTC

The USD/JPY lost a little ground on Wednesday, settling at 111.071, down 0.225 or -0.20% on position-squaring ahead of today’s Federal Reserve interest

USD/JPY Fundamental Forecast – April 28, 2016

The USD/JPY lost a little ground on Wednesday, settling at 111.071, down 0.225 or -0.20% on position-squaring ahead of today’s Federal Reserve interest rate decision and release of its latest monetary policy statement. The Bank of Japan will issue its monetary policy statement early Thursday.

The Fed is expected to keep its benchmark interest rate unchanged so the focus for traders will be squarely on the tone of its statement. Traders said Fed policymakers may be wary of sending too strong a message of an imminent policy tightening, particularly after another batch of disappointing data.

Overall, the FOMC is expected to leave its policy options wide open and stress data dependence, there is likely to be little in the way of catalysts for a repricing for a June rate hike. The surprise in the statement could be the use of stronger-than-expected language.

The USD/JPY could weaken further if the Fed is more-dovish than expected. However, it should firm if the statement strongly hints at a possible June rate hike.

After the Fed, it will be the BoJ’s turn to move the markets. Many market players expect the central bank to take some form of easing measures, including an increase in the purchase of stocks and a cut in interest rates.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur. Event Actual Forecast Previous
  USD API Weekly Crude Oil Stock -1.070M 0.800M 3.100M
  USD API Weekly Cushing Crude Oil Stock 1.900M   -02.35M
  NZD Trade Balance (MoM) (Mar) 117M 476M 339M
  NZD Trade Balance (MoM) (Mar) -3,380M -3,560M -3,320M
  AUD CPI (QoQ) (Q1) -0.2% 0.3% 0.4%
  AUD CPI (YoY) (Q1) 1.3% 1.8% 1.7%
  AUD Trimmed Mean CPI (QoQ) (Q1) 0.2% 0.5% 0.6%
  EUR GfK German Consumer Climate (May)   9.4 9.4
  GBP GDP (QoQ) (Q1)   0.4% 0.6%
  GBP GDP (YoY) (Q1)   2.0% 2.1%
  USD Goods Trade Balance (Mar)   -62.50B -62.50B
  USD Pending Home Sales (MoM) (Mar)   0.5% 3.5%
  USD Crude Oil Inventories   2.366M 2.080M
  USD FOMC Statement      
  USD Fed Interest Rate Decision   0.50% 0.50%
  NZD Interest Rate Decision   2.25% 2.25%
  NZD RBNZ Rate Statement      
  JPY BoJ Monetary Policy Statement (YoY)    
30-Minute USD/JPY, April 27, 2016
30-Minute USD/JPY, April 27, 2016

Upcoming Economic Events that you should be monitoring:

Thursday, April 28, 2016

Cur. Event Actual Forecast Previous
  JPY BoJ Outlook Report (YoY)      
  JPY BoJ Press Conference       
  EUR German Unemployment Change (Apr)   4K 0K
  USD GDP (QoQ) (Q1)   0.7% 1.4%

Government Bond Auctions

Date Time       Country           Auction

Apr 27 11:03 Sweden Holds bond auction

Apr 27 11:10 Italy Holds CTZ auction

Apr 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Apr 27 19:00 US 2-year FRN, 5-year note auctions

Apr 28 11:10 Italy Holds 5yr/10yr bond auctions

Apr 28 19:00 US Holds 7-year note auction

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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