USD/JPY Fundamental Analysis May 1, 2013 Forecast

Analysis and Recommendation:

The USD/JPY remained within its recent trading range as the US dollar gained 18 points this morning to trade at 97.95 after disappointing eco data showed a decline in retail sales and industrial production, even though unemployment fell to 4.1%. As the Japanese yen continues to trade below the 98.00 price range its strength is being felt on the Nikkei. The Bank of Japan on Friday put off additional monetary easing while providing optimistic predictions in its Outlook for Economic Activity and Prices report by boosting inflation forecasts. The outlook, released every six months, predicts that the BOJ and government’s goal of achieving 2 percent inflation will be within reach by fiscal 2015, with a predicted 1.9 percent rise in the consumer price index. Japanese industrial output grew less than estimated, bolstering the case for continued BOJ action. Data from the trade ministry showed production climbed 0.2 percent in March, less than the median 0.4 percent forecast in a Bloomberg survey.

This has halted the JPY’s march towards the 100 price level but the current price is tied directly to monetary stimulus and not to fundamental data, so any news from the bank or the Prime Minister could send the currency tumbling.

The dollar traded 0.2 percent from a one-week low versus the euro before the Federal Reserve begins a two-day meeting amid bets it will maintain its quantitative easing bond purchases for the foreseeable future. The greenback is poised for its first monthly drop since January versus the euro ahead of a U.S. report tomorrow forecast to show private employers added the fewest jobs in six months. The yen fell against a majority of its most-traded counterparts, adding to monthly declines, as an advance in Asian equities boosted demand for higher-yielding assets

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 April 30, 2013 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

May 01 00:30 Japan

May 01 13:00 US

May 02 08:50 France

May 02 09:10 Sweden

May 06 11:00 Norway

May 07 09:15 Austria

May 07 14:30 UK

May 07 15:30

May 07 17:00 US

May 08 09:30 Germany

May 08 09:30 Swiss

May 08 09:30 UK

May 08 14:30 Sweden