USD/JPY Fundamental Analysis – July 1, 2015 – Forecast

Analysis and Recommendation:

The USD/JPY drifted lower to 122.27 falling 27 points as the Japanese yen gathered momentum as safe havens trading  pushed up the JPY even the rally in the dollar this morning did not help the pair.  Monday’s moves continue to highlight the degree to which investors have struggled to interpret how risks would play out in the currency markets, particularly the growing uncertainty surrounding when the Fed would raise borrowing costs and whether Greece’s substantial debts would ultimately push it out from the Eurozone and upend financial markets.

“The Fed could hold off [on raising interest rates] if the Greek contagion spreads wider than people thought, or if the dollar strengthens too much,” said Waif Leif, head of global multi-assets at USAA Investments, with $68 billion in mutual fund assets.

Japanese stocks fell and the yen strengthened as Greece moved to avert the collapse of its financial system after aid talks with creditors fell apart, raising the risk it could be forced to exit the euro zone.

On Monday Japanese retail sales expanded 1.7 percent in May from the previous month, beating economists’ estimates for a 1 percent increase, data showed Monday. A separate report showed that industrial production contracted 2.2 percent last month from April, worse than expectations for a drop of 0.8 percent.

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, July 1, 2015

Government Bond Auctions

Date Time Country

Jun 29 11:30 Germany Eur 1.5bn 12M (Jun 2016) Bubills

Jun 30 11:10 Italy Eur 2-2.5bn Jun 2022 CCTeu, Eur 1-1.5bn 0.7%

Jul 01 11:30 Germany Eur 5bn Oct 2020 Bobl

Jul 02 10:30 Spain Auctions 3.75% Oct 2018, 1.15% Jul 2020 Bonos, plus 1.6%

Apr 2025 Obligation & 1% Nov 2030 Euro-I/L Obligation

Jul 02 11:10 France Eur 7.0-8.0bn 0.5% May 2025, 4.75% Apr 2035 & 4.50% Apr

Jul 02 11:30 UK Gbp 3.75bn 2.0% Jul 2020 Gilt

Jul 02 18:00 US Details 3/10 year notes, plus 30-year bond

Jul 07 11:10 Austria Holds RAGB bond sale

Jul 07 11:30 UK Conventional Gilt auction

Jul 07 19:00 US Auctions 3-year notes

Jul 08 11:30 Germany Eur 4bn Jun 2017 Schatz

Jul 08 17:30 Italy Announces details of BTP/CCTeu on 13 Jul