USD/JPY Fundamental Forecast – May 25, 2016

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Published: May 24, 2016, 03:53 UTC

The USD/JPY gained 17 points to 109.41 recovered off lows hit yesterday after Japans trade balance reported better than forecast. According to Bloomberg

USD/JPY Fundamental Forecast – May 25, 2016

The USD/JPY gained 17 points to 109.41 recovered off lows hit yesterday after Japans trade balance reported better than forecast. According to Bloomberg Fed Funds futures are indicating for the first time since March a better-than-even chance that the U.S. central bank will raise interest rates by its July meeting. The speculation is driving a dollar rally that’s somewhat reminiscent of early January, when a global equities selloff wiped out about $7 trillion of market value in the wake of a December rate hike by the Fed. Unlike back then, oil and China’s yuan are showing signs of stability and James Gorman, chief executive officer of Morgan Stanley, said he expects financial markets to rebound in a return to a “more normal environment.”

“If the U.S. does raise borrowing costs, we could see some risk-avoiding moves like we had last December,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “The market’s wary of this.”

Exports fell for the seventh consecutive month in April as the yen strengthened, underscoring the growing challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth. Overseas shipments declined 10.1 percent in April from a year earlier, the Finance Ministry said Monday.

Last weekend’s G7 with finance chiefs from the world’s biggest advanced economies at a hot springs resort in Sendai were marked by some of the sharpest dissonance in years between the U.S. and Japan over exchange-rate policies.

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.

Upcoming Economic Events that you should be monitoring:

Wednesday, May 25, 2016

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock			-1.140M
NZD	Trade Balance (YoY) (Apr)		-3,940M	-3,380M
NZD	Trade Balance (MoM) (Apr)		60M	117M
AUD	Construction Work Done (QoQ) (Q1)		-1.5%	-3.6%
EUR	EU Finance Ministers Meeting
USD	Goods Trade Balance (Apr)		-60.10B	-56.90B
USD	FOMC Member Harker Speaks
USD	Services PMI (May)		53.1	52.8
CAD	Interest Rate Decision		0.50%	0.50%
USD	Crude Oil Inventories			1.310M
USD	FOMC Member Kashkari Speaks
USD	FOMC Member Kaplan Speaks