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Barry Norman

EUR/JPY Fundamental Analysis – August 31, 2015 - Forecast
Analysis and Recommendations:

The EUR/JPY was up 10 points in the Asian session after the monthly data dump from the government. The pair is trading at 136.2 as data was very mixed. Retail sales beat forecast, as did inflation which remains very low but household spending tanked.  Household spending fell 0.2 percent from the year before, versus expectations for a 1.3 percent climb and after declining 2.0 percent in the previous month.

But retail sales rose 1.6 percent on year, beating forecasts for a 1.1 percent rise and following a 0.9 percent gain in the previous month. Retail trade increased 1.6 per cent in July from a year earlier, up from 1.0 per cent the previous month. Economists were looking for a 1.1 per cent gain.

Retail trade has now been positive for fourth months in a row, but the pace has slowed since April, when it expanded by 4.9 per cent. That, however, was the first positive reading for the year.

Month-on-month, retail sales were up 1.2 per cent in July from a 0.6 per cent contraction in June (which was revised from -0.8 per cent). The market was looking for a 0.6 per cent gain.

Sales at large retailers increased by 2.1 per cent year-on-year pace last month, from a 0.3 per cent fall in June.

Japan is one of the largest net importers of crude oil so a lower energy bill means consumer prices rise more slowly, a major obstacle to the central bank’s goal of achieving 2 percent inflation by the first half of fiscal 2016.

The benchmark Nikkei stock index opened down 0.1 percent following the data, but retail stocks rallied in early trade, with Fast Retailing and Aeon leading gains by 1 percent each.

However, investors shouldn’t pay too much attention to retail sales as an indicator of Japanese consumer spending, according to Capital Economics.

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.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  JPY

 

Household Spending (YoY) (Jul)

-0.2%

1.3%

-2.0%

 

 

  JPY

 

Household Spending (MoM) (Jul)

0.6%

2.2%

-3.0%

 

 

  JPY

 

Jobs/applications ratio (Jul)

1.21

1.19

1.19

 

 

  JPY

 

National Core CPI (YoY) (Jul)

0.0%

-0.2%

0.1%

 

 

  JPY

 

Tokyo Core CPI (YoY) (Aug)

-0.1%

-0.2%

-0.1%

 

 

  JPY

 

Retail Sales (YoY) (Jul)

1.6%

1.1%

0.9%

   

 

Upcoming Economic Events that you should be monitoring:

Monday, August 31, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

United Kingdom – Summer Bank Holiday

  NZD

 

Building Consents (MoM) (Jul)

 

 

-4.1%

 

 

  JPY

 

Industrial Production (MoM) (Jul)

 

 

1.1%

 

 

  AUD

 

HIA New Home Sales (MoM) (Jul)

 

 

 

 

 

  AUD

 

Company Gross Operating Profits

 

 

0.2%

 

 

  AUD

 

Private Sector Credit (MoM) (Jul)

 

 

0.4%

 

 

  CHF

 

KOF Leading Indicators (Aug)

 

 

99.8

 

 

  EUR

 

CPI (YoY) (Aug)

 

0.2%

0.2%

 

 

  CAD

 

Current Account (Q2)

 

 

-17.5B

 

 

  USD

 

Chicago PMI (Aug)

 

54.5

54.7

   

Government Bond Auctions

Date Time Country

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep

 

 

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