USD/JPY Monthly Fundamental Forecast August 2015

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Updated: Aug 1, 2015, 08:11 UTC

Outlook and Recommendation The USD/JPY closed the month at 123.85 in the middle of the trading range. Signs of a moderate recovery are emerging in the

USD/JPY Monthly Fundamental Forecast August 2015

Outlook and Recommendation

The USD/JPY closed the month at 123.85 in the middle of the trading range. Signs of a moderate recovery are emerging in the Japanese economy, with real GDP on track to expand by around 1% this year. The economy is supported by net exports that reflect recuperating shipments abroad and low imports on the back of persistently weak international oil prices. Moreover, private sector investment is anticipated to continue to strengthen given higher corporate profits, while household spending is underpinned by rising incomes and better employment conditions. Japan’s inflation outlook remains muted and the Bank of Japan (BoJ) estimates that core inflation (which excludes fresh food) will hover new zero in the coming months due to the impact of low oil prices. Accordingly, we assess that the BoJ’s 2% y/y inflation target will not be achieved before the end of 2016.

JPY is entering August around the lower end of its two-month range, with movement generally restrained by the offsetting impact of weaker fundamentals and the supportive influence of broader risk aversion. JPY sentiment is bearish.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events In August That You Should Be Monitoring:

Time	Cur.		Event	Forecast	Previous
Saturday, August 1, 2015
05:00	CNY		Manufacturing PMI (Jul)	50.2	50.2
Monday, August 3, 2015
05:45	CNY		HSBC Manufacturing PMI (Jul)		48.2
11:55	EUR		German Manufacturing PMI (Jul)	51.5	51.5
12:30	GBP		Manufacturing PMI (Jul)	51.6	51.4
18:00	USD		ISM Manufacturing PMI (Jul)	53.5	53.5
Tuesday, August 4, 2015
05:30	AUD		Retail Sales (MoM) (Jun)	0.5%	0.3%
08:30	AUD		Interest Rate Decision (Aug)	2.00%	2.00%
12:30	GBP		Construction PMI (Jul)	58.4	58.1
Wednesday, August 5, 2015
02:45	NZD		Employment Change (QoQ) (Q2)	0.5%	0.7%
12:30	GBP		Services PMI (Jul)	58.0	58.5
16:15	USD		ADP Nonfarm Employment	215K	237K
18:00	USD		ISM Non-Manufacturing PMI	56.2	56.0
Thursday, August 6, 2015
05:30	AUD		Employment Change (Jul)	15.0K	7.3K
12:30	GBP		Manufacturing Production	0.2%	-0.6%
15:00	GBP		Interest Rate Decision (Aug)	0.50%	0.50%
Friday, August 7, 2015
16:30	USD		Nonfarm Payrolls (Jul)	222K	223K
18:00	CAD		Ivey PMI (Jul)	53.0	55.9
Saturday, August 8, 2015
06:00	CNY		Trade Balance (Jul)		46.54B
Sunday, August 9, 2015
06:00	CNY		CPI (YoY) (Jul)		1.4%
Tuesday, August 11, 2015
13:00	EUR		German ZEW Economic		29.7
Wednesday, August 12, 2015
09:30	CNY		Industrial Production (YoY) (Jul)		6.8%
12:30	GBP		Average Earnings Index +Bonus		3.2%
12:30	GBP		Claimant Count Change (Jul)		7.0K
Thursday, August 13, 2015
16:30	USD		Core Retail Sales (MoM) (Jul)	0.4%	-0.1%
Friday, August 14, 2015
10:00	EUR		German GDP (QoQ) (Q2)		0.3%
13:00	EUR		CPI (YoY) (Jul)		0.2%
16:30	USD		PPI (MoM) (Jul)	0.2%	0.4%
Tuesday, August 18, 2015
12:30	GBP		CPI (YoY) (Jul)
Thursday, August 20, 2015
12:30	GBP		Retail Sales (MoM) (Jul)		-0.2%
Friday, August 21, 2015
16:30	CAD		Core CPI (MoM) (Jul)
16:30	CAD		Core Retail Sales (MoM) (Jun)		0.9%
Monday, August 31, 2015
		Holiday	United Kingdom – Summer Bank Holiday