USD/JPY Weekly Fundamental Analysis, October 6-10 2014, Forecast

Weekly Analysis and Recommendation:

The USD/JPY gained 132 points to trade at 109.78 as the US dollar gained momentum and the yen remained weak after being battered by poor economic data. The Bank of Japan will issue its monetary policy statement on Tuesday. The Bank of Japan remains fairly confident about Japan’s inflation and economic prospects. Nevertheless, BoJ Governor Kuroda has stated that the central bank would not hesitate to act if it assessed that achieving the 2% price stability target was under threat. The BoJ expects underlying inflation, which excludes the impact of the April tax hike as well as fresh food costs, to remain relatively stable in the near term at around 1¼% y/y, thereby failing to meet the authorities’ target, before approaching the 2% mark in 2015. Japan’s headline inflation remains temporarily elevated: consumer prices rose by 3.3% y/y in August and we expect annual inflation to decelerate to 2½% by the end of the year.

The JPY is entering October at six-year lows, having registered three consecutive months of decline in an environment of broad-based, fundamentally-driven USD strength.

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: 110.11 on September, 2014

Average: 83.18 over this period

Lowest: 75.58 on Oct 31, 2011

Events You Should Be Monitoring This Week:

CAD                      Ivey PMI

NZD                      NZIER Business Confidence

JPY                        Monetary Policy Statement

AUD                      Cash Rate

AUD                      RBA Rate Statement

JPY                        BOJ Press Conference

GBP                       Manufacturing Production m/m

CAD                      Building Permits m/m

USD                      FOMC Meeting Minutes

AUD                      Employment Change

AUD                      Unemployment Rate

GBP                       Asset Purchase Facility

GBP                       Official Bank Rate

GBP                       MPC Rate Statement

USD                      Unemployment Claims

EUR                      ECB President Draghi Speaks

CAD                      Employment Change

CAD                      Unemployment Rate

Upcoming Government Bond Auctions

Date Time Country 

Oct 07 06:00 Swiss Announces details of optional bond auction on Oct 08

Oct 07 09:00 Norway Bond auction

Oct 07 09:15 Austria RAGB auction

Oct 07 9:30 UK Auctions 3.5% 2045 Gilt

Oct 07 15:30 Italy Announces details of BOT auction on Oct 10

Oct 07 17:00 US 3Y Note auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction