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USD/JPY Fundamental Forecast – February 9, 2016

By:
Barry Norman

Analysis and Recommendation: The USD/JPY soared 43 points as the US dollar gained a bit while traders were disappointing with the Current Account figures

USD/JPY Fundamental Forecast – February 9, 2016

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Analysis and Recommendation:

The USD/JPY soared 43 points as the US dollar gained a bit while traders were disappointing with the Current Account figures released this morning sending the yen on a decline. The pair is trading at 117.32.  The yen has outperformed other major currencies this week, surging 3.6 percent versus the dollar, the most since July 2009. It was little changed at 116.74 per dollar as of 6:45 a.m. in London. It was as weak as 121.69 on Jan. 29 after the BOJ policy decision. Japan’s benchmark 10-year bond yield continued to decline this week, touching a record-low 0.025 percent Friday.

Blindsiding global financial markets on January 29, the BOJ adopted negative interest rates for the first time ever, buckling under pressure to revive growth in the world’s third-largest economy. It was a close call, with five members voting for negative interest rates and four against the surprise move.

“I am concerned that the Bank’s introduction of a negative interest rate could lead to a competition with central banks in other countries, which already have adopted negative interest rates, to lower interest rates deeper into negative territory,” one member said, according to the summary of opinions at the monetary policy meeting.

Members submit a summary of their opinions to BOJ Governor Haruhiko Kuroda, who edits them before their public release. Individual members are not identified in the release.

Japan’s current account surplus shrank in December to its lowest level in six months. In the final month of the year, Japan registered a current account surplus of Y960.7bn ($8.21bn) unadjusted, down from Y1.144tn in November, and also below forecasts for Y1.590tn.

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  
    China – Lunar New Year
    New Zealand – Waitangi
  JPY Adjusted Current Account  1.64T   1.42T  
  JPY Current Account n.s.a. (Dec)  0.96T 0.987T 1.144T

 

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Upcoming Economic Events that you should be monitoring:

Tuesday, February 9, 2016

Cur. Event Actual Forecast Previous  
  China – Lunar New Year
  AUD HIA New Home Sales (MoM) (Dec)     -2.7%  
  GBP BRC Retail Sales Monitor (YoY) (Jan)   0.4% 0.1%  
  AUD NAB Business Confidence (Jan)     3  
  EUR German Industrial Production (MoM)   0.4% -0.3%  
  EUR German Trade Balance (Dec)   20.2B 19.7B  
  GBP Trade Balance (Dec)   -10.35B -10.64B  
  GBP Trade Balance Non-EU (Dec)   -2.55B -2.45B  
  USD JOLTs Job Openings (Dec)   5.400M 5.431M

Government Bond Auctions

Date Time and Country

Feb 08 16:20 Italy Details of bond auction

Feb 09 11:00 Netherlands Holds DSL auction

Feb 09 11:00 Austria Holds bond auction

Feb 09 11:30 Germany Holds I/L bond auction

Feb 09 11:30 UK 0.125% 2026 Gilt linker auction

Feb 09 n/a UK Details of Gilt auction on Feb 17

Feb 09 19:00 US Holds 3-year note auction

Feb 10 11:30 Germany Euro 5bn Mar 2018 Schatz

Feb 10 17:20 Sweden Details of bond auction on Feb 17

Feb 10 19:00 US Holds 10-year note auction

Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction

Feb 11 11:03 Sweden Holds I/L bond auction

Feb 11 11:10 Italy Announces details of bond auction

Feb 11 11:30 UK 3.5% 2045 Gilt auction

Feb 11 19:00 US Holds 30-year bond auction

Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18

Feb 12 11:10 France Details of bond auction on 18 Feb

 

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