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USD/JPY Weekly Fundamental Analysis December 3 – 7, 2012, Forecast

By:
Barry Norman
Updated: Aug 20, 2015, 23:00 UTC

Introduction: In the USD/JPY trade, trying to pick tops or bottoms during that time would have been difficult. However, with the bull trend so dominant,

USD/JPY Weekly Fundamental Analysis December 3 – 7, 2012, Forecast

In this article:

USD/JPY Weekly Fundamental Analysis December 3 - 7, 2012, Forecast
USD/JPY Weekly Fundamental Analysis December 3 – 7, 2012, Forecast

Introduction: In the USD/JPY trade, trying to pick tops or bottoms during that time would have been difficult. However, with the bull trend so dominant, the far easier and smarter trade was to look for technical opportunities to go with the fundamental theme and trade with the market trend rather than to trying to fade it.
Against the Japanese yen, whose central bank held rates steady at zero, the dollar appreciated 19% from its lowest to highest levels. USD/JPY was in a very strong uptrend throughout the year, but even so, there were plenty of retraces along the way. These pullbacks were perfect opportunities for traders to combine technicals with fundamentals to enter the trade at an opportune moment. 

  • The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve
  • Japanese government intervention to maintain their currency sends USD/JPY lower

 

Weekly Analysis and Recommendation:

The USD/JPY closed the week at 82.47 a bit weaker than its opening on Monday at 82.56 but within a tight range. Political uncertainty, lackluster eco data and changing monetary policy are all weakening the JPY.  As electioneering reaches a peak, contender, Shinto Abe, the most likely winner, and next Prime Minister of Japan, continues to push his platform of additional monetary easing, more control over the Bank of Japan, higher inflation targets and direct linked monetary policy. Abe would force the Bank of Japan to adopt a 3% inflation target and increase easing until that target is met. Markets are scared of this sort of policy and the loss of independence for the central bank.

Date

Last

Open

High

Low

Change %

Nov 30, 2012

82.47

82.14

82.75

82.05

0.40%

Nov 29, 2012

82.15

82.16

82.22

81.92

-0.01%

Nov 28, 2012

82.16

82.09

82.21

81.69

0.08%

Nov 27, 2012

82.09

81.88

82.31

81.88

0.26%

Nov 26, 2012

81.88

82.56

82.62

81.86

-0.83%

On Friday, the BoJ announced additional easing, to help the faltering economy. This past week, Japan released their monthly data dump with fairly negative results, the only bright spot was an increase in industrial production.

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 for the week of November 26 – 30 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date

Currency

Event

Actual

Forecast

Previous

Nov. 26 

NZD

Trade Balance 

-718M

-536M

-775M

Nov. 27

NZD

Inflation Expectations (QoQ) 

2.3%

 

2.3%

 

USD

Core Durable Goods Orders (MoM) 

1.5%

-0.5%

1.7%

 

USD

Durable Goods Orders (MoM) 

0.0%

-0.6%

9.2%

 

USD

CB Consumer Confidence 

73.7

73.0

73.1

Nov. 28

AUD

Construction Work Done (QoQ) 

1.7%

2.7%

0.9%

 

USD

New Home Sales 

368K

390K

369K

 

JPY

Retail Sales (YoY) 

-1.2%

-0.7%

0.4%

Nov. 29

AUD

HIA New Home Sales (MoM) 

3.4%

 

-3.7%

 

AUD

Private New Capital Expenditure (QoQ) 

2.8%

2.0%

3.4%

 

USD

Initial Jobless Claims 

393K

390K

416K

 

USD

GDP (QoQ) 

2.7%

2.8%

2.0%

 

USD

Continuing Jobless Claims 

3287K

3323K

3357K

 

USD

Pending Home Sales (MoM) 

5.2%

0.8%

0.4%

 

NZD

Building Consents (MoM) 

-1.5%

 

7.6%

 

JPY

Tokyo Core CPI (YoY) 

-0.5%

-0.4%

-0.4%

 

JPY

Industrial Production (MoM) 

1.8%

-2.2%

-4.1%

 Nov. 30

USD

Core PCE Price Index (MoM) 

0.1%

0.2%

0.1%

 

USD

Personal Spending (MoM) 

-0.2%

0.2%

0.8%

 

USD

Chicago PMI 

50.4

50.5

49.9

Historical: From 2010 to present

Highest: 94.99 on May 05, 2010

Average: 82.77 over this period

Lowest: 75.58 on Oct 31, 2011

 

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

Date

Time

Currency

Event

Forecast

Previous

Dec. 03

00:30

AUD

Company Gross Operating Profits (QoQ) 

-2.5%

-0.7%

 

00:30

AUD

Retail Sales (MoM) 

0.4%

0.5%

 

15:00

USD

ISM Manufacturing Index 

51.3

51.7

Dec. 04

00:30

AUD

Building Approvals (MoM) 

-2.0%

7.8%

 

00:30

AUD

Current Account 

-14.8B

-11.8B

 

03:30

AUD

Interest Rate Decision 

3.00%

3.25%

Dec. 05

00:30

AUD

GDP (QoQ) 

0.6%

0.6%

 

13:15

USD

ADP Nonfarm Employment Change 

125K

158K

 

13:30

USD

Nonfarm Productivity (QoQ) 

2.7%

1.9%

 

13:30

USD

Unit Labor Costs (QoQ) 

-0.9%

-0.1%

 

15:00

USD

ISM Non-Manufacturing Index 

53.5

54.2

 

20:00

NZD

Interest Rate Decision 

2.50%

2.50%

Dec. 07

00:30

AUD

Trade Balance 

-2.05B

-1.46B

Government Bond Auction

Date Time Country 

Dec 03 10:30 Germany 

Dec 04 01:30 Japan 

Dec 04 10:30 Belgium 

Dec 04 15:30 UK 

Dec 05 09:30 Spain 

Dec 05 10:30 Germany 

Dec 05 11:00 Norway 

Dec 05 15:30 Sweden 

Dec 06 01:30 Japan 

Dec 06 09:50 France 

Dec 06 16:00 US 

Dec 07 16:30 Italy

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