EUR/JPY Fundamental Forecast – May 18, 2016

The EUR/JPY dipped 11 points as traders wait for industrial production figures today and GDP data tomorrow from the Asian country. Euro traders will be looking at Eurozone inflation data. The euro dipped a bit in the morning session as traders look at Greek debt once again and the effects of a No vote in the UK as it becomes a possibility that the UK will leave the Eurozone. The pair is trading at 123.31. The yen recovered a bit after the Finance Minister assured markets that they would not jump into to intervene in the currency markets. The Japanese way would not be to intervene ahead of the G-7 meetings or the summit the following week, and volatility isn’t all that great — it’s becoming more of a two-way market,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a Bloomberg interview. “The U.S. dollar is coming back and that’s where it will be for the second half of the second quarter and into the third quarter.

Falling risk appetite should support surplus and saving currencies relative to deficit and investment currencies, which nowadays often represent economic are as deploying massive overcapacities. JPY benefits from Japan’s 75% GDP net foreign asset position and the BoJ struggling to bring JPY-supportive real rates down. Instead of moving towards a quick implementation of ‘helicopter money’, the BoJ continues to discuss already tested and recently failing policy themes such as QQE, private asset purchases and a further cut in already negative interest rates.

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 18, 2016

Government Bond Auctions

Date Time       Country           Auction

May 18 11:30 Germany Eur 4bn Feb 2026 Bund

May 18 17:20 Sweden Announces details of bond auction on May 25

May 19 10:30 Spain Holds bond auction

May 19 11:03 Sweden Hold bond auction

May 19 11:50 France Holds bond auction

May 20 11:03 Sweden Sek 1.992bn 0.5% Jun 2017 I/L bond