USD/JPY Fundamental Analysis October 31, 2014 Forecast

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Updated: Aug 25, 2015, 07:00 UTC

Analysis and Recommendation: The USD/JPY soared to 109.01 after the US FOMC decision sent the US dollar soaring. The US Fed shifted language to a slightly

USD/JPY Fundamental Analysis October 31, 2014 Forecast

Analysis and Recommendation:

The USD/JPY soared to 109.01 after the US FOMC decision sent the US dollar soaring. The US Fed shifted language to a slightly more positive tone signaling that the US economy was in full recovery mode and interest rate hikes were in the near future. Janet Yellen, the chair of the US Federal Open Market Committee (FOMC) meeting, which had been involved in a two day police conference, had consistently said the asset program would come to an end in October.

The asset program, which began at $US85 billion a month under former Fed chair Ben Bernanke, has underpinned a rally in global share markets since it was announced in December 2012.

The FOMC also upgraded its assessment of the labour market but stuck to an assurance that short-term interest rates will remain near zero for a “considerable time”.

The committee said that based on its current assessment, 0 to 0.25 per cent would remain the target range for the federal funds rate for a considerable time, particularly if projected inflation continues to run below the 2 per cent longer-run goal and provided that longer-term inflation expectations remain well anchored.

The dollar rose to a three-week high against the yen, gaining 0.7% to 108.88 yen. The ICE Dollar index, which measures the dollar against a weighted basket of rival currencies, hit a three-week high before easing, and was recently up 0.7% to 85.99.

Japan’s industrial output rose more than expected to 2.7 percent in September from the month before, government data showed Wednesday, signaling that demand may be starting to recover from the dent caused by April’s tax hike.

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
NZD	Interest Rate Decision	3.50%	3.50%	3.50%
NZD	RBNZ Rate Statement
AUD	HIA New Home Sales	0.0%		3.3%

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
JPY	Household Spending		-4.3%	-4.7%
JPY	National Core CPI (YoY)		3.0%	3.1%
JPY	Tokyo Core CPI (YoY)		2.5%	2.6%
AUD	PPI (YoY) (Q3)			2.3%
AUD	PPI (QoQ) (Q3)			-0.1%
AUD	Private Sector Credit		0.4%	0.4%
JPY	BoJ Press Conference
EUR	German Retail Sales		-1.0%	2.5%
EUR	French Consumer		-0.3%	-0.7%
EUR	Italian CPI (MoM)		-0.2%	-0.4%
EUR	Core CPI (YoY) (Oct)		0.8%	0.8%
EUR	CPI (YoY) (Oct)		0.4%	0.3%
EUR	Unemployment Rate		11.5%	11.5%
USD	Core PCE Price Index			1.5%
CAD	GDP (MoM) (Aug)		0.0%	0.0%
USD	Chicago PMI (Oct)		60.0	60.5
USD	Michigan Consumer		86.4	86.4