USD/JPY Fundamental Analysis November 3, 2014 Forecast

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Updated: Aug 25, 2015, 07:00 UTC

Analysis and Recommendation: The USD/JPY surged 15 points as the yen weakened farther ahead of the Bank of Japan press conference. The JPY is trading at

USD/JPY Fundamental Analysis November 3, 2014 Forecast

Analysis and Recommendation:

The USD/JPY surged 15 points as the yen weakened farther ahead of the Bank of Japan press conference. The JPY is trading at 109.37. Japan’s economic recovery remained in the doldrums in September, as household spending fell, inflation edged lower and unemployment ticked up.

The data were released Friday as the Bank of Japan held a monetary policy meeting. As the U.S. winds down its own “quantitative easing,” Japan’s central bank faces pressure to increase stimulus to support growth as Prime Minister Shinzo Abe weighs approval of a sales tax hike next year.

Core inflation, excluding volatile food prices, was at 3.0 percent, down from 3.1 percent in August. Unemployment rose to 3.6 percent from 3.5 percent.

With just five months left before Governor Haruhiko Kuroda’s self-imposed deadline for banishing deflation, the Bank of Japan is preparing for failure, and the first casualty could be its facade of board unity.

There is almost no way the central bank can hit the two-year, 2 percent inflation target Kuroda set when he unleashed unprecedented monetary stimulus in April 2013. Economists think it is unlikely to even get close in the foreseeable future.

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 actual vs. forecast:

Cur.	Event	Actual	Forecast	Previous
JPY	Household Spending	-5.6%	-4.3%	-4.7%
JPY	Household Spending	1.5%	1.9%	-0.3%
JPY	National Core CPI (YoY)	3.0%	3.0%	3.1%
JPY	Tokyo Core CPI (YoY)	2.5%	2.5%	2.6%
AUD	PPI (YoY) (Q3)	1.2%	2.6%	2.3%
AUD	PPI (QoQ) (Q3)	0.2%	0.2%	-0.1%
AUD	Private Sector Credit	0.5%	0.4%	0.4%
JPY	BoJ Press Conference

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
AUD	AIG Manufacturing			46.5
AUD	Building Approvals			3.0%
CNY	Non-Manufacturing PMI			54.0
CNY	HSBC Mfg. PMI			50.4
EUR	Spanish Manufacturing			52.6
EUR	Italian Manufacturing		50.7	50.7
EUR	French Manufacturing		47.3	47.3
EUR	German Manufacturing		51.8	51.8
EUR	Manufacturing PMI		50.7	50.7
GBP	Manufacturing PMI			51.6
USD	ISM Employment		55.0	54.6
USD	ISM Manufacturing PMI		56.7	56.6