USD/JPY Weekly Fundamental Analysis December 2–6, 2013 Forecast

Weekly Analysis and Recommendation:

The USD/JPY tumbled to end at 102.31 after CPI data this week showed that the massive stimulus plan of the central bank and Prime Minister Abe’s THREE Arrow plan was turning the economy towards inflation. Traders now think these reports will encourage the central bank to step up their activity. In other data published Friday, household spending rose 0.9 percent last month, ahead of a sales tax hike next year, while the unemployment rate held steady at 4 percent.

Factory output expanded by a weaker-than-expected 0.5 percent in October, trailing 1.3 percent growth the previous month and way off an earlier manufacturers’ forecast, which had predicted a 4.7 percent rise in output.

Nomura Holdings Inc., Japan’s biggest brokerage, will raise salaries for about 4,000 employees in the country as Prime Minister Shinzo Abe urges companies to help defeat deflation and sustain the economic recovery.

Base pay at the Nomura Securities Co. unit will climb an average 2 percent starting in April, the Tokyo-based firm said in a statement on its website Friday. The increases target younger employees, who are more likely to spend money and contribute to the world’s third-largest economy, it said.

Abe is pushing businesses to pay their workers more as prices begin to climb while wages continue to slump, eroding households’ spending power. Consumer prices excluding fresh food rose 0.9 percent in October from a year earlier, a fifth straight gain, government figures showed the same day. Nomura’s 2 percent pay increase is the same rate as the Bank of Japan’s target for inflation. The central bank unveiled a policy in April of doubling the monetary base in two years to achieve the goal. Regular wages excluding overtime and bonuses fell 0.6 percent in September from a year earlier, the 16th consecutive decline, labor ministry figures show.

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.

Historical: From 2011 to present

Highest: 103.73 on May 22, 2013

Average: 83.18over this period

Lowest: 75.58 on Oct 31, 2011

Major Economic Events for the week of November 25-29 actual v. forecast for Yen, the Aussie, the Kiwi and USD

 

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD

Government Bond Auction

Date Time Country 

Dec 03 10:30 Belgium

Dec 03 15:30 UK

Dec 04 10:30 Germany

Dec 04 10:30 Portugal

Dec 04 15:30 Sweden

Dec 05 09:30 Spain

Dec 05 09:50 France

Dec 05 10:10 Sweden

Dec 05 12:00 Norway

Dec 05 16:00 US

Dec 06 16:30 Italy