USD/JPY Fundamental Analysis – August 4, 2015 – Forecast

Analysis and Recommendation:

The USD/JPY added 17 points as the greenback is trading in the green the pair broke over the 124 price level. Chinese manufacturing data missed again this morning putting pressure on all Asian currencies.  A key China economic indicator took a sharp turn for the worse, with the final reading for the Caixin China purchasing managers’ index (PMI) for July surprising with a drop to a two-year low.

“The downturn in China’s manufacturing sector intensified at the start of the third quarter. Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011,” the news release said.

Concerns about slowing economic growth on the mainland have spurred policy makers to action. Late last month the People’s Bank of China cut interest rates and the reserve requirement ratio (RRR) for some lenders in a bigger-than-expected easing package.

The Bank of Japan’s efforts to reach its 2 percent inflation target didn’t get much of a boost from the latest data, with the country’s core consumer price index for June barely budged and as households unexpectedly snapped their wallets shut.

A Japan government official laid the blame on bad weather for the month, adding that June’s decline doesn’t necessarily mean there’s a change in the moderate uptrend in household spending, according to a Reuters report.

Most of Japan experiences a rainy season in June, but while that’s an annual occurrence, some reports said there were more rainy days than usual this year. Lower than usual temperatures may also have hurt clothing sales.

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:

Tuesday, August 4, 2015

Government Bond Auctions

Date Time Country

Aug 04 11:10 Austria Holds RAGB bond sale (Reserve date)

Aug 04 11:30 UK Auctions 2% 2025 Gilt

Aug 05 11:30 Germany Eur 4bn Oct 2020

Aug 05 11:30 Sweden Holds bond auction

Aug 06 10:30 Spain Auctions Bonos

Aug 06 11:10 France Auctions OATs

Aug 10 17:30 Italy Announces details of BTP/CCTeu on 13 Aug

Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt

Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund

Aug 13 11:10 Italy Auctions BTPs/CCTeus