USD/JPY Fundamental Forecast – September 7, 2016

The USD/JPY held at the 103 level gaining 10 points as the US dollar stabilizes. The US markets were closed for the Labor Day holiday leaving the greenback with low volumes. Japan ministers at the G20 assured global leaders that the economy was slowly improving.

Bank of Japan Governor Haruhiko Kuroda said on Monday there is ample room to expand monetary stimulus such as by deepening negative interest rates and accelerating asset purchases. He also said the central bank should not rule out the possibility of considering new ideas or taking drastic measures if necessary to achieve its 2% inflation target.

“Even within the current framework, there is ample room for further monetary easing … and other new ideas should not be off the table,” Kuroda said in a seminar.

The Japanese government warns its banks will move their European HQs out of London if the Brexit negotiations fail to secure the financial services passport to operate in the EU.

“If Japanese financial institutions are unable to maintain the single passport obtained in the UK, they would face difficulties in their business operations in the EU and might have to acquire corporate status within the EU anew and obtain the passport again, or to relocate their operations from the UK to existing establishments in the EU,” said the report.

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 September 7, 2016

Government Bond Auctions

Date Time Country Auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction