EUR/JPY Fundamental Analysis – August 6, 2015 – Forecast

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Published: Aug 5, 2015, 04:13 UTC

Analysis and Recommendations: The EUR/JPY dipped 17 points to trade at 135.18 as the euro declined as traders worried about stress building in Greece. The

EUR/JPY Fundamental Analysis – August 6, 2015 – Forecast

Analysis and Recommendations:

The EUR/JPY dipped 17 points to trade at 135.18 as the euro declined as traders worried about stress building in Greece. The Japanese yen saw little action ahead of the Bank of Japan meeting this week. The Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers, said economists at the International Monetary Fund.

There is likely to be a “minimum” level of demand for Japanese government bonds from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management requirements, said IMF economists Serkan Arslanalp and Dennis Botman.

“The sustainability of the BOJ’s current pace of JGB purchases may become an issue,” they wrote in the paper released on Monday in Washington.

“The BOJ may need to taper its JGB purchases in 2017 or 2018.”

While Gov. Haruhiko Kuroda said in May that he expects no obstacles in buying government bonds, the IMF analysts join Nomura Securities Co. and BNP Paribas SA in questioning the sustainability of the unprecedented debt purchases. The BOJ could deliver continued stimulus by extending the maturity of its JGB purchases or by scaling up private asset purchases if needed, the IMF economists wrote.

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
CNY		Caixin Services PMI (Jul)	53.8	52.2	51.8

Upcoming Economic Events that you should be monitoring:

Thursday, August 6, 2015

Cur.	Event	Actual	Forecast	Previous
AUD	Employment Change (Jul)		15.0K	7.3K
GBP	Manufacturing Production (Jun)		0.2%	-0.6%
GBP	BoE Inflation Report
GBP	Interest Rate Decision (Aug)		0.50%	0.50%
GBP	BoE MPC Meeting Minutes
GBP	BoE Gov Carney Speaks