USD/JPY Fundamental Analysis October 28, 2014 Forecast

By:

Updated: Aug 25, 2015, 03:00 UTC

Analysis and Recommendation: The USD/JPY eased by 17 points as the greenback tumbled in the Asian session to trade at 107.97 ahead of this week’s FOMC and

USD/JPY Fundamental Analysis October 28, 2014 Forecast

Analysis and Recommendation:

The USD/JPY eased by 17 points as the greenback tumbled in the Asian session to trade at 107.97 ahead of this week’s FOMC and Bank of Japan statements. A leading Japanese government official said Prime Minister Shinzo Abe should delay a planned sales-tax increase, the strongest sign yet that economic weakness is causing concern among those close to the premier ahead of the difficult tax decision. Powerful interests like the Finance Ministry, the Bank of Japan and major corporations want Abe to raise the tax as planned next year to keep Japan’s promise to reduce the biggest debt burden in the industrial world. But the economic and political environment is making it harder for Abe to make unpopular policy choices.

Japan’s treasury-bill yields turned negative for the first in at least five years last month after the European Central Bank became the first major monetary authority to guide rates below zero. Three-month Treasury bill yielded minus 0.08 percent, while the six-month security yielded minus 0.05 percent.

Investors can make money by buying three-month bills and selling them to the central bank even if yields are negative, according to Makoto Yamashita, the Japan rates strategist in Tokyo at Deutsche Securities Inc., another primary dealer.

The BOJ’s failure to buy all 3 trillion yen of bills it sought from the market on Oct. 17 spurred speculation it will increase buying of longer-dated bonds. The central bank offered to purchase a record 3.5 trillion yen of bills on Oct. 3.

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
	Holiday	New Zealand – Labour Day
USD		Pending Home Sales		0.5%	-1.0%

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
JPY	Retail Sales (YoY) (Sep)		0.6%	1.2%
USD	Core Durable Goods		0.5%	0.4%
USD	Durable Goods Orders		0.6%	-18.4%
USD	S&P/CS HPI Composite		5.8%	6.7%
USD	Consumer Confidence		87.0	86.0