USD/JPY Fundamental Analysis April 27, 2012, Forecast

Analysis and Recommendation: (close of Asian session)

The USD/JPY  is trading at 81.18, as all eyes are now on Tokyo, where the Japanese central bank is likely to hold interest rates at near zero but markets are hoping for another liquidity injection as the economy’s recovery stutters.

The Bank of Japan has already this year said it will pump tens of billions of dollars more into the system to help businesses and try to dig the country out of a painful deflationary cycle.

The euro bought $1.3229 and 107.60 yen in early Asian trade, compared with $1.3215 and 107.49 yen.

The dollar was flat at 81.18 yen.

However, there is still some nervousness about Europe after Britain slipped back into a technical recession as the economy contracted 0.2 percent in the January-March quarter following 0.4 percent shrinkage in the previous three months.

And across the Channel political uncertainty in France and the Netherlands has raised concerns about a fiscal pact agreed by the eurozone last year, while weak economic data has also hit confidence.

Economic Data for April 25-26^th, 2012 actual v. forecast

 

Economic Events scheduled for April 27, 2012 that affect the NZD, AUD, and JPY

01:00     AUD       HIA New Home Sales (MoM) (Mar)                                       

HIA New Home Sales released by the Housing Industry Association presents the number of new home sales in Australia. It indicates the housing market condition. House buyers spend money on furnishing and financing their homes, which stimulates the demand for goods, services, and the employees

05:00     JPY         Housing Starts (YoY) (Mar)                                        

The Housing Starts released by the Ministry of Land, Infrastructure and Transport captures how many new single-family homes or buildings were constructed. It shows the strength of the Japanese housing market, which can be considered as the economy as a whole due to Housing Starts” sensitivity to changes in the business cycle

05:00     JPY         Annualized Housing Starts (Mar)                            

The Annualized Housing Starts released by the Ministry of Land, Infrastructure and Transport captures how many new single-family homes or buildings were constructed. It shows the strength of the Japanese housing market, which can be considered as the economy as a whole due to Housing Starts’ sensitivity to changes in the business cycle

12:30     USD       Gross Domestic Product Annualized (Q1)                            

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30     USD       Gross Domestic Purchases Price Index (Q1)                       

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30     USD       Real Personal Consumption Expenditures (QoQ) (Q1)

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55     USD       Reuters/Michigan Consumer Sentiment Index (Apr)

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money.

Government Bond Auctions (this week and first week in May)

Apr 27  09:10  Italy   BTP/CCTeu auction

Apr 27  09:10  Italy   Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01  09:30  UK  Auctions 4.5% 2042 Conventional Gilt

May 02  09:10  Sweden  Nominal bond auction

May 02  09:30  Portugal  Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02  13:00  US  Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y

Bonds on May 10

May 02  14:30  Sweden  Details T-bill auction on May 09

May 03  08:30  Spain  Bono auction

May 03  08:50  France  OAT auction