USD/JPY Fundamental Analysis December 24, 2012 Forecast

Analysis and Recommendation:

The USD/JPY fell below the 84.00 price level to trade this morning at 83.95 as traders look for safe havens once again, giving the JPY some additional momentum. With the Bank of Japan decision behind the markets traders are correcting for an overreaction to the additional stimulus. As market participants react to the BoJ’s decision to increase its asset purchase program by ¥10trn to ¥101trn while pledging to discuss its price stability goal at the next meeting on January 22nd. As such, the BoJ’s 1.0% inflation goal remains at odds with Prime Minister-elect Abe’s proposed 2.0% target. The BoJ also provided additional detail on its Stimulating Bank Lending Facility, similar to the BoE’s FLS, which aims to channel low-cost credit to the economy via financial institutions. For USDJPY, this recent reversal has erased the majority of gains over the past two sessions, and congestion appears to be anchored around 84.00.

Late yesterday there was a distinct change to market mood, with a global move in the last two hours of US trading, after positive data in jobs, manufacturing and GDP helped support the US dollar.

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.

Economic Data December 21, 2012 actual v. forecast

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

There are no eco events on the calendar for Monday, December 24 and markets will be closed on Tuesday December 25^th. Traders and politicians are expected to be out of their offices for the season with low volume and low volatility. The only global issue is the US fiscal deadline. I would like to wish all of my readers a safe and healthy holiday season and all the best in the new year.

Government Bond Auction

Date Time Country 

Dec 21 16:30 Italy  

Dec 26 01:30 Japan 

Dec 27 10:10 Italy  

Dec 28 10:10 Italy