EUR/JPY Weekly Fundamental May 6 – 10, 2013 Forecast

Weekly Analysis and Recommendations:

The EUR/JPY closed the week at 128.1105 staying in a fairly tight range after the BoJ surprised markets holiday rates and policy after getting the support of the G20 and the IMF. Bank of Japan policymakers agreed during their April 3 to 4 policy meeting that the central bank needed to enter “a new phase of monetary easing,” with some of its members calling for steps that would have an impact on financial markets, the minutes of the meeting said Thursday.

“Some members expressed the view that it was important for the bank to introduce a policy that would have an impact in terms of scale, so that the markets would perceive that it had decided to take all necessary measures” to attain the 2 percent inflation target, the minutes said.

At its first policy meeting chaired by Gov. Haruhiko Kuroda, the BOJ decided to double the monetary base in two years, adopting it as the main target for money market operations instead of the overnight call rate.

Europe is a mess, with a handful of Southern European countries in depression and many of the other nations on the continent in recession. Inflation has been exceptionally low, even in economically strong Germany. So it would be a good time for “Super Mario” Draghi to come to the rescue, but the European Central Bank president didn’t quite deliver on Thursday. The bank cut target interest rates by a quarter of a percentage point, leaving the ECB’s key interest rate at a record low of 0.50 percent, but that wasn’t quite the salve that the 27 percent of Spanish workers who are unemployed might hope for. Yet in Draghi’s news conference following a meeting of its rate-setting council in Slovakia, it became clear that the central bank is starting to weigh some bigger and bolder things to try to get a monetary policy in place that will match the moment for Europe.  

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.

Major Economic Events for the week of April 29 – May 3 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Historical: From 2010 to Present

Highest: 134.38 JPY on Jan 11, 2010

Average: 111.13 JPY over this period.

Lowest: 94.12 JPY on July 24, 2012

 

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD

Upcoming Government Bond Auctions

Date Time Country 

May 06 11:00 Norway

May 07 09:15 Austria

May 07 14:30 UK Details

May 07 15:30 Italy

May 07 17:00 US

May 08 09:30 Germany

May 08 09:30 Swiss

May 08 09:30 UK

May 08 14:30 Sweden

May 08 15:30 Italy

May 08 17:00 US

May 09 08:30 Spain

May 09 17:00 US

May 10 09:10 Italy

May 10 09:10 Norway