Advertisement
Advertisement

USD/JPY Fundamental Forecast – May 26, 2016

By:
James Hyerczyk
Updated: May 25, 2016, 10:56 GMT+00:00

The USD/JPY traded lower in limited price action, finishing at 109.927, down 0.058 or -0.05%.  The Japanese Yen found support from BoJ Kuroda’s speech in

Japanese Yen

The USD/JPY traded lower in limited price action, finishing at 109.927, down 0.058 or -0.05%.  The Japanese Yen found support from BoJ Kuroda’s speech in parliament today, where he mentioned issues over exiting the BoJ’s easy monetary policy.

Kuroda’s comments came as a surprise to traders, as for the first time ever he spoke on rolling back the ongoing accommodative monetary policy regime.  Weakness in the Japanese equity market also weighed down on the USD/JPY, with the Nikkei 225 index now up +1.61% versus +1.85 seen earlier.

Today can best be described as a “data lite” day with no major economic releases expected. The calendar suggests the USD/JPY will be largely influenced by a few Fed speakers. Lately, they have been hawkish so if they continue the trend then the U.S. Dollar may rebound against the Japanese Yen later today.

The sideways price action of late suggests that dollar investors are looking for further incentives to challenge recent highs and move yet higher. These fresh incentives could come in the form of more data due later this week, and Japan’s stance on fiscal stimulus, which would in turn boost the Nikkei and improve risk appetite.

The dollar could take its cues over the next few days from data including U.S. initial jobless claims and pending home sales on Thursday and Japanese inflation and U.S. first quarter GDP figures on Friday.

Fed Chair Janet Yellen is also due to speak on Friday, which is also the concluding day for the Ise-Shima G7 Summit being held in Japan.

FxEmpire provides in-depth analysis for each asset 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 up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur. Event Actual Forecast Previous
  USD API Weekly Crude Oil Stock -5.137M -3.300M -1.140M
  USD API Weekly Cushing Crude Oil Stock -0.189M -0.950M 0.508M
  NZD Trade Balance (MoM) (Apr) 292M 60M 117M
  NZD Trade Balance (YoY) (Apr) -3,660M -3,940M -3,380M
  AUD Construction Work Done (QoQ) (Q1) -2.6% -1.5% -3.6%
  EUR GfK German Consumer Climate (Jun)   9.7 9.7
  EUR German Business Expectations (May)   100.8 100.4
  EUR German Current Assessment (May)   113.2 113.2
  EUR German Ifo Business Climate Index (May)   106.8 106.6
  EUR EU Finance Ministers Meeting  
  USD Goods Trade Balance (Apr)   -60.10B -56.90B
  USD FOMC Member Harker Speaks  
  USD Services PMI (May)   53.1 52.8
  CAD Interest Rate Decision   0.50% 0.50%
  USD Crude Oil Inventories   -2.450M 1.310M
  USD Cushing Crude Oil Inventories   0.461M
  USD FOMC Member Kashkari Speaks  
  USD FOMC Member Kaplan Speaks  
  AUD Private New Capital Expenditure (QoQ) (Q1)   -3.0% 0.8%

30-Minute USD/JPY
Upcoming Economic Events that you should be monitoring:

Thursday, May 26, 2016

Cur. Event Actual Forecast Previous
  GBP BBA Mortgage Approvals   44.8K 45.1K
  GBP Business Investment (QoQ) (Q1)   0.1% -2.0%
  GBP GDP (YoY) (Q1)   2.1% 2.1%
  GBP GDP (QoQ) (Q1)   0.4% 0.4%
  USD FOMC Member Bullard Speaks  
  USD Core Durable Goods Orders (MoM) (Apr)   0.3% -0.2%
  USD Durable Goods Orders (MoM) (Apr)   0.5% 1.3%
  USD Initial Jobless Claims   275K 278K
  AUD RBA Assist Gov Debelle Speaks  
  USD Pending Home Sales (MoM) (Apr)   0.6% 1.4%
  USD FOMC Member Powell Speaks  
  AUD RBA Assist Gov Debelle Speaks  
  JPY National Core CPI (YoY) (Apr)   -0.4% -0.3%
  JPY Tokyo Core CPI (YoY) (May)   -0.4% -0.3%

Government Bond Auctions

May 25 11:03 Sweden Sek 1bn 3.5% 2022 & Sek 3bn 1% 2026 bonds

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 25 19:00 US Holds 5Yr Notes Auction, 2Yr FRN

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn Apr 2021 Bobl

Jun 01 11:30 UK 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction

 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Advertisement