USD/JPY Fundamental Forecast – April 29, 2016

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Published: Apr 28, 2016, 03:46 UTC

The USD/JPY tumbled 2.15 points to 109.30 after the Bank of Japan decision today as well as strong data after industrial production and retail sales beat

The USD/JPY tumbled 2.15 points to 109.30 after the Bank of Japan decision today as well as strong data after industrial production and retail sales beat expectations. Bloomberg said that the Bank of Japan on Thursday held off on expanding monetary stimulus, as Governor Haruhiko Kuroda and his colleagues opted to take more time to assess the impact of negative interest rates.

The FOMC on Wednesday held rate and policy and did not change the its policy statement letting the US dollar to fall a bit lower.

The move comes as a surprise to the slight majority of economists surveyed by Bloomberg who had projected some action from the central bank in response to a strengthening in the yen that has cast a shadow over prospects for higher wages and investment. Policy makers are betting that their success in bringing down borrowing costs since unveiling the negative-rate strategy in January will generate an acceleration in lending.

Board members Thursday left unchanged three key easing tools — the 80 trillion-yen target for expanding the monetary base, mostly through bond purchases, the 0.1 per cent negative rate on a portion of the cash banks park at the BOJ, and a program to buy riskier assets including stocks. Separately, they postponed their time frame for reaching a 2 per cent inflation target, for the fourth delay in about a year.

The latest inflation figures, released earlier in the day, show consumer prices, including energy prices, fell 0.3% in March. Inflation expectations among households are also at the weakest level in three years, while wage growth has slowed as the global slowdown makes businesses more cautious.

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
NZD	Interest Rate Decision	2.25%	2.25%	2.25%
JPY	Household Spending (YoY) (Mar)	-5.3%	-4.2%	1.2%
JPY	Household Spending (MoM) (Mar)	0.5%	-0.3%	1.7%
JPY	Jobs/applications ratio (Mar)	1.30	1.28	1.28
JPY	National Core CPI (YoY) (Mar)	-0.3%	-0.2%	0.0%
JPY	Tokyo Core CPI (YoY) (Apr)	-0.3%	-0.3%	-0.3%
JPY	Industrial Production (MoM) (Mar)	3.6%	2.9%	-5.2%
JPY	Retail Sales (YoY) (Mar)	-1.1%	-1.5%	0.4%
JPY	BoJ Monetary Policy Statement
JPY	Interest Rate Decision	-0.10%	-0.10%	-0.10%
JPY	BoJ Outlook Report (YoY)
GBP	Nationwide HPI (YoY) (Apr)		5.0%	5.7%
JPY	BoJ Press Conference
EUR	German Unemployment Change (Apr)		4K	0K
EUR	German Unemployment Rate (Apr)		6.2%	6.2%
EUR	German CPI (MoM) (Apr)		-0.2%	0.8%
USD	GDP (QoQ) (Q1)		0.7%	1.4%
USD	Initial Jobless Claims		260K	247K

Upcoming Economic Events that you should be monitoring:

Friday, April 29, 2016

Cur.	Event	Actual	Forecast	Previous
	Japan – Showa Day
NZD	Building Consents (MoM) (Mar)			10.8%
NZD	ANZ Business Confidence (Apr)			3.2
AUD	PPI (QoQ) (Q1)		0.2%	0.3%
AUD	Private Sector Credit (MoM) (Mar)		0.6%	0.6%
EUR	German Retail Sales (MoM) (Mar)		0.3%	-0.4%
EUR	Core CPI (YoY)		0.9%	1.0%
EUR	GDP (QoQ) (Q1)		0.4%	0.3%
EUR	Unemployment Rate (Mar)		10.3%	10.3%
GBP	BoE MPC Member Cunliffe Speaks
USD	Core PCE Price Index (MoM) (Mar)		0.1%	0.1%
USD	Personal Spending (MoM) (Mar)		0.2%	0.1%
CAD	GDP (MoM) (Feb)		-0.1%	0.6%
CAD	RMPI (MoM) (Mar)		3.7%	-2.6%
USD	Chicago PMI (Apr)		53.0	53.6
USD	Michigan Consumer Expectations		80.2	79.6
USD	Michigan Consumer Sentiment (Apr)		90.0	89.7
USD	Baker Hughes U.S. Rig Count			343