EUR/JPY Fundamental Forecast – March 18, 2016

The EUR/JPY saw small gains to trade at 126.41 as the yen and the euro weakened after climbing late on Thursday after the Federal Reserve. The Japanese saw a significant decline in exports and imports.  Japanese trade data for February continued to underwhelm with exports yet again undershooting expectations.

From a year earlier, exports contracted by 4.0%, the fifth annual decline in a row. Though an improvement on the 12.9% drop seen in January, the figure missed expectations for a smaller decline of 3.1%.

By destination, exports fell by 6.1% to Asia, although those to China rebounded by 5.1% having tanked 17.5% in January. Those to the US grew by 0.2%, an improvement on the 5.3% decline reported previously.

On the other side of the ledger, imports contracted by 14.2%, smaller than both the 18.0% decline of January and expectations for a drop of 15.2%.

The national trade balance swung back to surplus as a result of the two, coming in at 242.8 billion yen. The figure slightly undershot forecasts for an increase to 388.6 billion.

Exports to China rose 5.1% in February, the first increase in seven months, but those to the broader Asian region slipped 6.1%, the sixth consecutive monthly decline, the ministry said. About half of Japanese exports go to Asia.

Exports to the U.S.–the largest importer of Japan-made goods–rose a modest 0.2% after sliding for two months in a row.

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Thursday, March 18, 2016

Government Bond Auctions

Date Time and Country

Mar 17 10:30 Spain Eur 2-3bn; 0.25% Jan 2019 Bono, 1.95% Apr 2026, 5.75% Jul 2032

Mar 17 10:50 France Eur 6-7bn; 3.5% Apr 2020, 0.25% Nov 2020, 2.25% Oct 2022 OATs

Mar 17 11:50 France Eur 1.5-2bn 0.10% Sep 2021

Mar 17 18:00 US Usd 11bn 10-year TIPS

Mar 21 11:00 Belgium OLO auction – CANCELLED

Mar 21 11:30 Germany Eur 1.5bn Mar 2017 Bubill

Mar 21 17:20 Italy Details of Zero-coupon/BTP€i auction

Mar 22 10:00 Netherlands Holds bond auction

Mar 23 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Mar 23 17:20 Italy Details of bond auction

Mar 23 17:20 Sweden Details of bond auction on Mar 30

Mar 23 16:30 US Holds 2-year FRN auction

Mar 24 11:10 Italy Holds zero-coupon/BTP€i auction