EUR/JPY Fundamental – November 18, 2015 – Forecast

Analysis and Recommendations:

The EUR/JPY dipped 5 points to 131.57 as the euro and the yen traded on a weak note. Japan’s economy shrank again in the third quarter; underscoring the challenges Prime Minister Shinzo Abe faces in trying to engineer a sustainable recovery. Japanese Preliminary GDP dropped by an annualized 0.8 percent in the third quarter. This was a second straight contraction for GDP, which means that technically the economy in a recession. The weak reading was much worse than expected, as the estimate stood at -0.2%. There are both domestic and global factors which are responsible for the Japanese economy’s poor performance.

Consumer and business spending are down, inflation is anemic, and weaker global demand, especially from China, has hampered economic growth. Attention will now shift to the BOJ, which releases a monetary policy statement on Thursday. Will the BOJ change monetary policy? Many analysts are calling for the BOJ to act now, but recent statements from BOJ policymakers have sounded surprisingly optimistic, so the BOJ may take the easy route and announce an economic package rather than implement new stimulus measures. Still, the BOJ will be under increasing pressure to act after the dismal GDP report, and this could weigh on the yen during the week.

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:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, November 18, 2015

Government Bond Auctions

Date Time Country

Nov 18 11:30 Germany New Eur 5bn Dec 2017 Schatz

Nov 18 11:30 UK 2% 2025 Gilt auction

Nov 18 11:30 Portugal Eur 1-1.25bn; bond auction

Nov 18 16:30 Sweden Announces details of Bond on 25 Nov

Nov 18 N/A Holland Announces details of Bond on 24 Nov

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus