USD/JPY Weekly Fundamental September 3-7, 2012, Forecast

Posted September 02, 2012 4:08 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Introduction: In the USD/JPY trade, trying to pick tops or bottoms during that time would have been difficult. However, with the bull trend so dominant, the far easier and smarter trade was to look for technical opportunities to go with the fundamental theme and trade with the market trend rather than to trying to fade it.
Against the Japanese yen, whose central bank held rates steady at zero, the dollar appreciated 19% from its lowest to highest levels. USD/JPY was in a very strong uptrend throughout the year, but even so, there were plenty of retraces along the way. These pullbacks were perfect opportunities for traders to combine technicals with fundamentals to enter the trade at an opportune moment.

The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve
Japanese government intervention to maintain their currency sends USD/JPY lower

Weekly Analysis and Recommendation:

The USD/JPY ended the week down, as the greenback continued to weaken. As market expectations turned more positive, that Mr. Bernanke, might introduce or at least support additional stimulus, the USD fell. Mid week the dollar was able to break out of the tight range below the 78.50 price, but fell lower after a letter to Rep. Issa was released which was the most current data available to the markets, which fully supported additional stimulus. The pair ended the week at 78.39

Date	Last	Open	High	Low	Change %
Aug 31, 2012	78.39	78.54	78.61	78.20	-0.19%
Aug 30, 2012	78.54	78.73	78.73	78.50	-0.25%
Aug 29, 2012	78.73	78.57	78.79	78.48	0.19%
Aug 28, 2012	78.58	78.76	78.77	78.46	-0.23%
Aug 27, 2012	78.76	78.75	78.84	78.66	0.01%

On Friday, Japan released most of its eco data for July showing a continued drop in industrial production, with most of the data showing a lackluster economy. Also news from China continued to show an ongoing slow down.

This week markets will be focused on the ECB and news from China with the hopes that the PBoC will institute an easing policy.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Tier 1 and 2 Economic Releases for August 27-31, 2012

Date	Currency	Event	Actual	Forecast	Previous
Aug. 27	SEK	Swedish Retail Sales (MoM)	0.30%	0.20%	-0.30%
	EUR	German Ifo Business Climate Index	102.3	102.6	103.2
	EUR	German Current Assessment	111.2	110.8	111.5
	EUR	German Business Expectations	94.2	95.0	95.5
Aug. 28	AUD	HIA New Home Sales (MoM)	-5.6%		2.8%
	EUR	GfK German Consumer Climate	5.9	5.9	5.9
	USD	CB Consumer Confidence	60.6	66.0	65.4
Aug. 29	AUD	Construction Work Done (QoQ)	-0.2%	1.0%	7.8%
	CHF	KOF Leading Indicators	1.57	1.50	1.41
	EUR	German CPI (MoM)	0.3%	0.2%	0.4%
	USD	GDP (QoQ)	1.7%	1.7%	1.5%
	USD	Pending Home Sales (MoM)	2.4%	1.0%	-1.4%
	USD	Beige Book
	NZD	Building Consents (MoM)	2.0%	3.0%	5.7%
Aug. 30	JPY	Retail Sales (YoY)	-0.8%	-0.2%	0.2%
	AUD	Building Approvals (MoM)	-17.3%	-5.0%	-1.0%
	AUD	Private New Capital Expenditure (QoQ)	3.4%	2.4%	7.7%
	EUR	German Unemployment Change	9K	8K	9K
	USD	Core PCE Price Index (MoM)	0.0%	0.1%	0.2%
	CAD	Current Account	-16.0B	-15.0B	-10.2B
	USD	Personal Spending (MoM)	0.4%	0.4%	0.0%
	USD	Initial Jobless Claims	374K	370K	374K
	USD	Continuing Jobless Claims	3316K	3307K	3321K
Aug. 31	KRW	South Korean Industrial Production (YoY)	0.3%	0.5%	1.4%
	JPY	Unemployment Rate	4.3%	4.3%	4.3%
	JPY	Tokyo Core CPI (YoY)	-0.5%	-0.6%	-0.6%
	JPY	Industrial Production (MoM)	-1.2%	1.7%	0.4%
	GBP	Nationwide HPI (MoM)	1.3%	0.1%	-0.8%
	EUR	CPI (YoY)	2.6%	2.5%	2.4%
	EUR	Unemployment Rate	11.3%	11.3%	11.3%
	CAD	GDP (MoM)	0.2%	0.1%	0.1%
	USD	Chicago PMI	53.0	53.5	53.7
	USD	Michigan Consumer Sentiment	74.3	73.6	73.6

Historical: From 2010 to present

Highest: 94.99 on May 05, 2010

Average: 82.77 over this period

Lowest: 75.58 on Oct 31, 2011

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date	Time	Currency	Event	Forecast	Previous
Sep. 04	05:30	AUD	Interest Rate Decision	3.50%	3.50%
	15:00	USD	ISM Manufacturing Index	50.0	49.8
Sep. 05	02:30	AUD	GDP (QoQ)	0.8%	1.3%
	14:00	CAD	Interest Rate Decision	1.00%	1.00%
Sep. 06	02:30	AUD	Employment Change	5.0K	14.0K
	02:30	AUD	Unemployment Rate	5.3%	5.2%
	12:00	GBP	Interest Rate Decision	0.50%	0.50%
	12:45	EUR	Interest Rate Decision	0.75%	0.75%
Sep. 07	15:00	CAD	Ivey PMI	58.0	62.8

Government Bond Auction

Date Time Country

Sep 03 09:10 Norway Bond auction

Sep 03 10:00 Belgium OLO auction

Sep 04 00:30 Japan Auctions 10Y JGBs

Sep 04 09:15 Austria Bond auction

Sep 04 09:30 Belgium Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04 14:30 UK Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05 09:10 Sweden Nominal bond auction

Sep 05 09:30 Germany Eur 5.0bn Sep 2022 Bund auction

Sep 05 09:30 UK 4.5% 2042 Gilt auction

Sep 06 00:30 Japan Auctions 30Y JGBs

Sep 06 08:30 Spain Bono auction

Sep 06 08:50 France OAT auction

Sep 06 09:10 Sweden I/L bond auction

Sep 06 15:00 US Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07 15:30 Italy

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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