Add a comment
Weekly Analysis and Recommendations:
The EUR/JPY closed the week well within its average trading range. The pair ended at 1.3210 after hitting a high of 133.37 this week. Earlier in the week the euro was trading on a negative bias as safe haven trades supported the US dollar and the Japanese currency. After military intervention eased the euro was able to recover its composure and the Japanese yen eased.
On Friday Prime Minister Abe approved the sale tax increase which has been waiting for his final approval and is part of his three arrow approach to being deflation. The Bank of Japan’s central aim is to achieve inflation rates of 2% in the next two years and reverse decades of stagnant growth. Stimulus plans in Japan make up a larger percentage of GDP than the quantitative easing programs designed by the Fed, and this can only weaken the yen as long as policymakers remain committed to this course of action.
Diverging policy in the U.S. and Japan has created bond-yield differentials in 10-year government debt that is now at multi-year highs above 2.2%. Confirmation that the Fed is truly ready to reduce monthly asset purchases and allow the U.S. economy to start working on its own merits will only propel these trends, and this could start as early as next week. Currently, markets are expecting the Fed to reduce monthly stimulus injections by $10 billion, so any number greater than that will push the U.S. dollar to new highs for the year.
Looking ahead, the fate of the yen rests on Prime Minister Abe’s level of commitment in achieving official inflation goals and weakening the currency to support export companies.
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 September 9-13 actual v. forecast for Yen, the Aussie, the Kiwi and USD
Tertiary Industry Activity Index (MoM)
Chinese Fixed Asset Investment (YoY)
Chinese Industrial Production (YoY)
BSI Large Manufacturing Conditions
Historical: From 2011 to Present
Highest: 133.80JPY on May 22, 2013
Average: 109.45JPY over this period.
Lowest: 94.12 JPY on Jul 24, 2012
Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD
Government Bond Auction
Date Time Country
Sep 16 09:00 Slovakia
Sep 16 09:10 Norway
Sep 17 08:30 Spain
Sep 17 09:30 Belgium
Sep 18 09:10 Sweden
Sep 18 09:30 Germany
Sep 18 09:30 Portugal
Sep 19 08:30 Spain
Sep 19 08:50 France
Sep 19 09:30 UK
Sep 19 09:50 France
Sep 19 15:00 US
Sep 19 17:00 US
Sep 20 15:30 Italy
No comments:
Post a Comment