USD/JPY Fundamental Analysis October 24, 2014 Forecast

By:

Updated: Aug 25, 2015, 02:00 UTC

Analysis and Recommendation: The USD/JPY climbed 90 points to trade at 107.27 as the US dollar gained momentum. Japanese manufacturing PMI printed better

USD/JPY Fundamental Analysis October 24, 2014 Forecast

Analysis and Recommendation:

The USD/JPY climbed 90 points to trade at 107.27 as the US dollar gained momentum. Japanese manufacturing PMI printed better than expected at 52.8 against forecast of 52.1. The surge can be accounted for by the fall of the yen. The Bank of Japan failed to meet its bond-buying target as investors balked at the liquidity being pumped out as part of efforts to reflate the economy.

The central bank bought just Y2.6tn of treasury bills, short of its Y3tn target. It was its first miss since May 2012 and also the first time since the initiation of “quantitative and qualitative easing” (QQE) in April 2013. The asset purchasing programme is part of plans by Haruhiko Kuroda, BoJ governor, to double the monetary base to Y270tn by the end of this year. The programme forms a key plank of Japan’s efforts to banish the deflation that has dogged it for more than a decade and, together with fiscal measures, stimulate the economy.

“In essence the BoJ wants to give more liquidity to the system than the market wants, or wants to purchase more T-bills than the market wants to sell,” said Naka Matsuzawa, chief Japan rates strategist at Nomura.

The U.S. dollar extended broad-based gains on Wednesday after marginally higher-than-expected U.S. inflation data coupled with earlier concerns over European banks sent the greenback to one-week highs

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
AUD	RBA Governor Stevens
NZD	CPI (YoY) (Q2)	1.0%	1.3%	1.6%
NZD	CPI (QoQ) (Q2)	0.3%	0.5%	0.3%
JPY	Foreign Bonds Buying	-1,169.1B		784.2B
JPY	Foreign Investments	-412.6B		-254.6B
AUD	NAB Quarterly Business	6		6
JPY	Manufacturing PMI	52.8	52.1	51.7
CNY	HSBC Mfg. PMI	50.4	50.3	50.2

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
NZD	Trade Balance (MoM)		-700M	-472M
NZD	Trade Balance (YoY)		1,510M	2,020M
GBP	GDP (QoQ) (Q3)		0.7%	0.9%
GBP	GDP (YoY) (Q3)		3.0%	3.2%
USD	New Home Sales (Sep)		470K	504K
USD	New Home Sales (MoM)		-5.8%	18.0%