The USD/JPY reacted harshly to the US warning about currency manipulation at the G7 summit. The yen actually gained in the morning session to trade at
The USD/JPY reacted harshly to the US warning about currency manipulation at the G7 summit. The yen actually gained in the morning session to trade at 109.82 even as the US dollar declined. The pair gave up 31 points. Japan released trade balance data with positive numbers at a surplus of ¥430 billion, above the ¥270 billion surplus seen, while imports plunged 23.2% and exports eased 10.1%.
Intraday bias remains bearish till the time pair holds key resistance at 110.58 marks.
Japanese exports declined 10.1% annually in April, much worse than March’s 6.8% year-over-year decline, government data showed on Monday. A median estimate of economists called for exports to fall 10% annually.
Meanwhile, imports declined for a 16th consecutive month, falling 23.3% annually. The decline was much worse than the median estimate, which called for a 19% year-over-year drop. As a result, Japan’s trade surplus rose to 823.5 billion yen in April, up from 755 billion yen the previous month.
If a country’s exports exceed its imports, as in Japan’s recent case, there is in theory a high demand for its goods and therefore for its currency.
“The April trade surplus was due in large part to weak imports. Still, the data was enough to trigger yen buying,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
“The trade numbers came out against a political backdrop that does not favor Japan intervening to weaken the yen, thus making it relatively easy for participants to buy back the yen.”
A Group of 7 finance ministers’ meeting concluded on Saturday with the United States warning Japan against intervening to weaken the yen, displaying a well-known rift between the two countries on currency intervention.
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Upcoming Economic Events that you should be monitoring:
Tuesday, May 24, 2016
Cur. | Event | Actual | Forecast | Previous | |||
USD | FOMC Member Harker Speaks | ||||||
AUD | RBA Governor Stevens Speaks | ||||||
EUR | ZEW Economic Sentiment | 23.4 | 21.5 | ||||
EUR | Eurogroup Meetings | ||||||
USD | New Home Sales (MoM) (Apr) | 2.0% | -1.5% | ||||
USD | New Home Sales (Apr) | 523K | 511K |
Government Bond Auctions
Date Time Country Auction
May 23 N/A UK Syndicated tap of 0.125% I/L 2046 Gilt
May 23 11:03 Sweden Sek 1.25bn 0.125% Jun 2019 I/L bond
May 23 11:30 Germany Eur 1.5bn May 2017 Bubill
May 23 12:00 Norway Details of bond auction on May 25
May 23 17:20 Italy Details of Zero‐coupon/BTP€i auction
May 25 11:03 Sweden Holds bond auction
May 25 11:05 Norway Holds bond auction
May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund
May 26 11:10 Italy Announces details of bond auction
May 26 11:10 Italy Holds Zero‐coupon/BTP€i auction
May 26 17:20 Sweden Details of I/L auction on Jun 02