USD/JPY Fundamental Analysis – August 27, 2015- Forecast

Analysis and Recommendation:

The USD/JPY gained 39 points as the yen eased as markets moved slowly back to risk on trading after the cash injection by the Chinese to support their markets. The pair is trading at 119.25 well below its 2015 trading range and is expected to slowly move back to the 120 price. The US dollar soared against other major currencies after slumping to seven-month low against the Japanese yen and euro in the previous session.

After plummeting on Monday following a rout in global equity markets, the currency soared on Tuesday. The dollar index, which measures the greenback against six major peers, was down 1.71 percent at 93.386 in late trading on Monday, Xinhua reported.

The People’s Bank of China (PBOC), China’s central bank, announced on Tuesday a cut in the reserve requirement ratio (RRR) and lower key interest rates. Worries about  China’s economic slowdown was soothed by the move, which was described in a PBOC statement as “promoting restructuring” to “stabilize the real economy”.

The yen swung between being the best and worst Group-of-10 currency on Wednesday as Chinese stocks fluctuated, a day after the People’s Bank of China stepped up stimulus.

A gauge of currency volatility climbed to the highest since early July. The Shanghai Composite Index tumbled to an eight-month low Tuesday, leading a global rout in equities that has wiped out about $8 trillion in market value since the PBOC devalued the yuan on Aug. 11. Futures traders have pared odds that the Federal Reserve will raise interest rates this year to about 46 percent, the lowest since at least the start of this year

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:

Thursday, August 27, 2015

Government Bond Auctions

Date Time Country

Aug 25 00:00 UK Announces details of Jan 2021 gilt

Aug 25 17:30 Italy Announces details of BTP/CCTeu on 28 Aug

Aug 25 19:00 US Holds 2-year note auction

Aug 26 11:10 Italy Eur 3bn 0.15% Aug 2017 CTZ

Aug 26 19:00 US Holds 2-year FRN note auction

Aug 26 12:05 Norway Holds bond auction

Aug 26 19:00 US Holds 5-year note auction

Aug 26 19:00 US Holds 2-year FRN auction

Aug 27 11:03 Sweden Sek 0.5bn 0.125% I/L Jun 2019, Sek 0.5bn 1% Jun 2025 bonds

Aug 27 19:00 US Holds 7-year note auction

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep