Economic Events: (GMT)
Jan. 30 23:00 KRW South Korean Industrial 2.1% 5.6%
23:30 JPY Unemployment Rate 4.5% 4.5%
23:50 JPY Industrial Production (MoM) 2.9% -2.7%
13:30 USD Core PCE Price Index (MoM) 0.1% 0.1%
13:30 USD Personal Spending (MoM) 0.2% 0.1%
13:30 USD Employment Cost Index (QoQ) 0.4% 0.3%
14:45 USD Chicago PMI 63.0 62.5
15:00 USD CB Consumer Confidence 68.2 64.5
Feb. 01 13:15 USD ADP Nonfarm Employment Change 190K 325K
15:00 USD ISM Manufacturing Index 54.5 53.9
Feb. 02 13:30 USD Nonfarm Productivity (QoQ) 1.0% 2.3%
13:30 USD Initial Jobless Claims 373K 377K
13:30 USD Unit Labor Costs (QoQ) 0.9% -2.5%
13:30 USD Continuing Jobless Claims 3565K 3554K
15:00 USD Fed Chairman Bernanke Testifies
Feb. 03 00:15 USD FOMC Member Fisher Speaks
13:30 USD Average Hourly Earnings (MoM) 0.2% 0.2%
13:30 USD Nonfarm Payrolls 150K 200K
13:30 USD Unemployment Rate 8.5% 8.5%
13:30 USD Private Nonfarm Payrolls 170K 212K
15:00 USD ISM Non-Manufacturing Index 53.2 52.6
The USD/JPY foreign currency exchange rate is the price of one U.S. dollar - the base currency - in terms of Japanese yen - the quote currency. For example, a bid/ask quote of 89.29/89.32 means that one U.S. dollar can be bought for 89.32 yen and one U.S. dollar can be sold at 89.29 yen.
If the U.S. dollar is expected to appreciate against the yen, then the above quote might rise to say, 89.73/89.76. The forex strategy in this case would be to buy USD/JPY. If, on the other hand, the U.S. dollar is expected to depreciate against the yen, then the above quote might fall to say, 88.68/88.71. The forex strategy in this case would be to sell USD/JPY.
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.
Daily range average : 80-90 pips Best time to trade: Asian Session (2400 GMT - 0900 GMT) Some factors affecting the USD/JPY rate:
- 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
USD/JPY Weekly Fundamental Analysis Jan. 30- Feb. 3, 2012, Forecast
Analysis and Recommendation:
The USD/JPY ended the week at 76.69 -0.76 (-0.98%)
The pair traded on weakness of the USD based on economic reports and the FOMC statement on interest.
US Durable Goods orders in Dec surprise to upside but how much was pulled forward from 2012 due to 12/31 expiration of full depreciation expensing?
Jan US confidence rises to best since Feb '11
Richmond and KC manufacturing survey's both rise
Q4 US GDP rises 2.8%, a touch below expectations but nominal GDP gains just 3.2%, the weakest since Q3 '09. If deflator was in line with expectations, Real GDP would have been up just 1.3%. Real final sales up just .8% vs. 3.2% in Q3
Initial Jobless Claims normalize at 377k after holiday distorted 356k last week
Inflation expectations within UoM rise to 3.3%, the most since Sept and remains above the 20 yr avg of 3.0%. Expectations also rise to multi month highs in TIPS market
New Home Sales remain weak, prices fall 12.8% y/o/y
FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don't know what assets are really worth, how can capital be efficiently allocated?
This week's movement has been in response to the weakness developed in the USD from the FOMC statements and continuing with the weak economic data from the US.
The Japanese unemployment report is due out Monday and might add to the weakness of the JPY, as it is expected to increase due to manufacturing weakness.
Upcoming Sovereign Bond Sales Dates
Jan 30 10:10 Italy BTP/CCTeu auction
Jan 30 10:10 Norway Nok 4.0bn 5.0% May 2015 bond
Jan 30 11:00 Belgium OLO Auction
Jan 30 12:00 Norway Details bond auction on Feb 06
Jan 31 10:30 Belgium Auctions 3 & 6M T-bills
Jan 31 15:30 UK Details gilt auction on Feb 07
Feb 01 10:10 Sweden Auctions T-bills
Feb 01 10:30 Germany Eur 5.0bn 2.0% Jan 2022 Bund
Feb 01 10:30 Portugal Eur 0.75-1.0bn 3M T-bill
Feb 01 10.30 UK Auctions 5.0% 2025 conventional Gilt
Feb 01 15:30 Sweden Details nominal bond auction on Feb 08
Feb 01 16:00 US
Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb
08 & 30Y Bonds on Feb 09
Feb 02 09:50 France OAT Auction
Feb 02 10.30 UK Auctions 0.125% 2029 I/L Gil
USD/JPY Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3