USD/JPY Fundamental Analysis – August 19, 2015 – Forecast

Analysis and Recommendation:

The USD/JPY  climbed 4 points to trade at 124.44 as the greenback traded in a positive mode. There was little action in the Asian session and the pair moved to the whims of the dollar.  The move by the People’s Bank of China serves to highlight the increasing level of concern awarded to the world’s second-largest economy.

As previously reported, Chinese exports in July came in 8.3% lower than the prior year after fears that the strength of the yuan was rendering Chinese exports uncompetitive.

A strong currency makes a country’s exports more expensive, which in turn reduces export volume therefore eroding any trade surplus.

Japan’s economy contracted last quarter as consumers and businesses cut spending, putting pressure on Prime Minister Shinzo Abe to return his focus to his economic policies, dubbed “Abenomics.” The Japanese economy has contracted 0.4 per cent in the April-June quarter, the government says, as worries linger over the government’s growth policies.

Weak consumption and slow exports weighed on the world’s third largest economy, which shrank an annualized 1.6 per cent, after posting growth in the previous two quarters, according to the Cabinet Office figures.

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 up to the data analysis and information in our weekly reports.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, August 19, 2015

Government Bond Auctions

Date Time Country

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug