USD/JPY Fundamental Analysis – November 19, 2015 – Forecast

Analysis and Recommendation:

The USD/JPY  dipped 8 points to 123.37 after hitting its highest level in months as the US dollar continues to rally as the days pass to the Fed December meeting. The ongoing speaking circuit of FOMC members all seems to echoing the same words – rate increase in December.  It seems to unanimous.

The Federal Reserve will have a green light to lift interest rates for the first time in nearly a decade when it meets in December. The rhetoric coming out of the Fed has been rather hawkish, notably from Vice Chairman Stanley Fischer and Federal Reserve Bank of New York President William Dudley.

  Japan’s current account surplus was reported to have increased four-fold in the period between April and September compared to the previous year. The ¥8.69 trillion surplus quadrupling has been on the back of a weak Yen and the continuing slide in crude oil prices. Lower energy prices have been very significant for Japan, as the nation has been dependent on energy imports since the earthquake and tsunami struck in 2011. In value terms, the Finance Ministry reported that the imports of crude oil fell by 34%.

Japan has slipped back into recession, shrinking -0.8 per cent for the July-September quarter, following the -0.7 per cent contraction of the previous quarter.

Consumer spending actually recorded some weak growth, of 0.5 per cent. However, capital investment declined by 1.3 per cent, dragging down the economy overall. Business remains concerned over the relative economic slowdown in China, Japan’s largest trading partner, and over the weak prospects for the economy in general.

This is the second recession under Abe’s Liberal Democratic Party government, following that of last year, in the wake of the consumption tax rate being raised from 5 to 8 per cent.

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, November 19, 2015

Government Bond Auctions

Date Time Country

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus