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USD/JPY Fundamental Forecast – May 27, 2016

By:
Barry Norman
Published: May 26, 2016, 04:06 UTC

The USD/JPY was busy this morning as the pair dipped 47 points to 109.71 as traders were less worried about BoJ intervention after assurances from the

USD/JPY

The USD/JPY was busy this morning as the pair dipped 47 points to 109.71 as traders were less worried about BoJ intervention after assurances from the government that it was not inclined to lower the currency.  The US dollar fell in the morning session as traders booked profits after the currency surged to its highest level in several weeks.  According to Bloomberg Japanese Finance Minister Taro Aso is letting the currency market know what he considers to be excessive moves that could push the government toward intervention for the first time since 2011.

A two-day move of 5 yen in either direction would be considered one-way and lopsided, Aso said in parliament on Tuesday, adding that the government has no intention of further lowering the currency to boost competitiveness and absolutely no intention of devaluing the yen in a sustained manner. The last time the yen strengthened about 5 yen versus the dollar in two days was after the Bank of Japan left policy unchanged April 28.

“The yen declined as far as 105, 106 per dollar and it’s now around 109 yen, so if I were to say it’d be good for it to settle around there that would immediately be news, so I need to tone down my remarks,” Aso told lawmakers in Tokyo.

The yen has weakened more than 3.5 percent since reaching an 18-month high of 105.55 on May 3. The yen surged on Thursday, taking some of the wind out of the sails of the recently buoyant dollar and leaving investors scrambling to cover positions.

The dollar earlier had stuck close to its recent ranges, as investors looked ahead to a speech by Federal Reserve chief Janet Yellen on whether a rate increase is imminent and on a pending decision on a planned sales tax hike in Japan.

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:

Friday, May 27, 2016

Cur. Event Actual Forecast Previous
  AUD RBA Assist Gov Debelle Speaks        
  JPY National Core CPI (YoY) (Apr)   -0.4% -0.3%  
  JPY Tokyo Core CPI (YoY) (May)   -0.4% -0.3%  
  USD GDP (QoQ) (Q1)   0.9% 0.5%  
  USD GDP Price Index (QoQ) (Q1)   0.7% 0.7%  
  USD Michigan Consumer Expectations   86.6 87.5  
  USD Michigan Consumer Sentiment (May)   95.4 95.8  
  USD Fed Chair Yellen Speaks        
  USD Baker Hughes U.S. Rig Count     318

Government Bond Auctions

Date Time       Country           Auction

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn Apr 2021 Bobl

Jun 01 11:30 UK 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction

 

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