EUR/JPY Weekly Fundamental Analysis, October 27-31, 2014, Forecast

Weekly Analysis and Recommendations:

The EUR/JPY  closed the week on a positive note as traders moved away from the safety f the yen as sentiment shifted back to the positive side. This weekend’s ECB stress test is keeping euro traders alert. The pair is trading at 137.01. Data that showed strong manufacturing growth for the eurozone in October continued to support the euro Friday, even as reports circulated that 25 European banks had failed European Central Bank stress tests. The official results of the tests are due Sunday. Despite inflation remaining extremely low across the eurozone and signs that the recovery is weakening in the single currency bloc, the European Central Bank kept its interest rates unchanged at its monthly meeting. Analysts are now looking for Mario Draghi’s assessment of the extraordinary measures introduced in June and details of any further measures.

In the latest Wall Street Journal survey of 13 economists who closely watch BOJ policy, nine of them said the central bank has effectively pushed back the time frame for achieving 2% inflation to “three years” from “two years,” as its price target appears increasingly hard to meet.

“‘About two years’ is a fuzzy concept that probably means they think they can achieve the goal at some point within fiscal 2015,” ending in March 2016, said Hideo Kumano, executive chief economist at Dai-ichi Life Research Institute.

The BOJ has already muddied the waters surrounding the time frame through the language used in its price forecasts and by the governor himself. People familiar with the bank’s thinking have also said that BOJ officials are using a much looser concept of the price target timetable than a strict interpretation of a spring 2015 finish line.

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.

Historical: From 2011 to Present

Highest: 143.00 JPY on September 2014

Average: 109.45 JPY over this period.

Lowest: 94.12 JPY on Jul 24, 2012

 

Major Economic Events for the week of October 27-31st

 

Upcoming Government Bond Auctions

Date Time Country 

Oct 27 12:30 Germany Eur 2.0bn new 12M Bubill (Oct 2015) auction

Oct 27 18:30 Italy Announces details of BTP/CCTeu auctions on Oct 30

Oct 27 12:10 Italy BTPei/CTZ auctions

Oct 28 12:10 Italy BOT auction

Oct 28 19:00 US 2Y Note auction

Oct 29 12:03 Sweden Bond auction

Oct 29 12:30 Germany Eur 4.0bn Aug 2024 Bund auction

Oct 29 17:30 US 2Y FRN auction

Oct 29 19:00 US 5Y Note auction

Oct 30 12:10 Italy BTP/CCTeu auctions

Oct 30 19:00 US 7Y Note auction