My forecasts by EURUSD, GBPUSD, USDCHF, USDJPY, GOLD - page 44

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BOJ likely to leave policy unchanged this week say sources

A preview of the Bank of Japan monetary policy meeting due this week (September 14 and 15) ...And what BOJ preview would be complete without the views of sources 'familiar with their thinking'?

(OK, this one, from late last week, that looked at the latest Reuters survey of analysts/economists, 33 of 35 say the BOJ will leave policy unchanged)

Reuters have sources saying:

  • The BOJ will stand pat this week
  • Board numbers have moved closer to Governor Kuroda's dovish views
  • Board is concerned about diminishing policy options and the drain of liquidity from the JGB market (due to all the BOJ has bought)
  • There is little (nothing) the BOJ can do about headwinds from overseas (weak global demand, China slowing cited for example)
  • Government concerns over any further weakening of the yen and increase the price of imports limits the BOJ also

    • The article notes a few positives:

  • Record company profits ...(and hopes that some of these will be used to boost wages & capex)
  • Household income up a little
  • Household consumption up a little

source

 

USD/JPY forecast for the week of September 28, 2015

The USD/JPY pair initially broke out above the top of the triangle that the market has been stuck in for quite some time. However, by the end of the week we closed back within the parameters all that triangle, and that of course means that we are not ready to go higher. If we can break above the top of the shooting star that form for the week, we believe that’s a very bullish sign. As far selling is concerned, it’s almost impossible to do until we get below the 118.50 level.

 

USD/JPY Forecast Sep. 28-Oct. 2

USD/JPY posted modest gains last week, as the pair closed at 120.55. This week’s highlights are Retail Sales and the Tankan indices. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

The US dollar got some help from the Fed last week, as Yellen surprised with a relatively hawkish speech, and the week ended on a positive note as Final GDP for Q2 posted a strong gain. In Japan, inflation indicators posted declines, underscoring weak economic activity.

  1. Retail Sales: Tuesday, 23:50. Retail Sales is the primary gauge of consumer spending, one of the engines of economic growth. The indicator has posted four straight gains, including a July reading of 1.6%, which beat the forecast of 1.1%. The markets are expecting another respectable gain in August, with an estimate of 1.3%.
  2. Housing Starts: Wednesday, 5:00. Housing Starts provide a snapshot of the level of activity in the housing sector. The indicator posted a gain of 7.4% in July, but this fell short of the estimate of 11.2%. The forecast for the August report is a gain of 7.7%.
  3. Tankan Manufacturing Index: Wednesday, 23:50. This indicator is based on a survey of large manufacturers and is a key event. The indicator improved to 15 points in Q2, its strongest showing in five quarters. This reading was better than the estimate of 12 points. For Q3, the markets are expecting a reading of 13 points.
  4. Tankan Non-Manufacturing Index: Wednesday, 23:50. This indicator continues to improve, and hit an impressive 23 points in Q2, matching the forecast. The Q3 report is expected to be almost as strong, with a forecast of 21 points.
  5. Final Manufacturing PMI: Thursday, 1:35. The index has been slightly above the 50-line since May, indicative of slight expansion in the manufacturing sector. The August reading came in at 51.7 points, within expectations. The estimate for the September release stands at

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JPY Momentum Falls Sharply; Stay Short - BNPP

Japan investor outflows again surged for the week of September 25 with foreign bond purchases again above JPY 1 trillion, notes BNP Paribas.

"This should be sufficient to keep USDJPY supported until rising US investor flows guide the pair higher heading into year-end," BNPP argues.

Furthermore, BNPP newest quant FX product – BNP Paribas FX Momentum – signals that JPY-positive momentum has slowed sharply over recent weeks from a peak of +64 to just +16 this week.

"Accordingly, this signal suggests that prospects for JPY appreciation have diminished considerably. We target 124.40 on our long USDJPY from 119.50," BNPP adds.

 

USD/JPY forecast for the week of October 5, 2015

The USD/JPY pair fell significantly during the course of the week, dropping down rather significantly. However, the market turned back around to form a hammer, and as a result it looks like the markets going to go higher given enough time. The 120 level continues to be a bit of a magnet for price in general, and a break above the top of the hammer should send this market looking for the 121 level, and then eventually the 125 level. With that being said, we are buyers and not sellers although we recognize that it will probably have to be done off of short-term charts.

source

 

USD/JPY Forecast Oct. 5-9

USD/JPY posted modest losses last week, as the pair closed slightly below the 120 level. There are six events this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

In the US, the NFP report was a huge disappointment, ending the trading week on a sour note. The yen held its own, but wasn’t able to take advantage of the NFP’s poor performance. In Japan, consumer spending indicators were mixed, as were the Tankan indices.

  • Average Cash Earnings: Monday, 1:30. This indicator is linked to consumer spending, which is a key driver of economic growth. After a sharp decline in July, the indicator rebounded in August, posting a gain of 0.6%. However, this was well short of the forecast of 2.1%. Little change is expected in the upcoming release, with an estimate of 0.7%.
  • Monetary Policy Statement: Wednesday, Tentative. The Japanese economy is limping along, as domestic activity remains weak and inflation is stuck at low levels. There is speculation that the BOJ may make a move later in the year, so the markets will be looking for clues about a shift in monetary policy.
  • Leading Indicators: Wednesday, 5:00. This indicator is based on 11 indicators, but is a minor event since most of the data has already been released. In July, the indicator slipped to 104.9%, matching the forecast. The estimate for the August release stands at 103.4%.

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USD/JPY forecast for the week of October 12, 2015

The USD/JPY pair went back and forth during the course of the week, essentially doing nothing. We believe that the market is essentially going to sit around the 120 handle, so it’s only a matter time before we get some type of trade as markets can’t sit still forever. Nonetheless, we do not have a trading opportunity at this point, so we will simply sit on the sidelines when it comes to longer-term trades in the USD/JPY pair. At this point in time, we still favor the upside but recognize that the market is essentially stagnant.

 

USD/JPY Forecast Oct. 12-16

USD/JPY posted modest losses last week, as the pair closed slightly below the 120 level. The upcoming week is a quiet one, with just five events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

The yen was the only major currency that failed to post gains against the dollar following the release of the Fed minutes. Japanese releases were mixed, as Current Account beat the estimate, but Core Machinery Orders posted a sharp decline and missed expectations. In the US, Services PMI and Trade Balance were weaker than expected. There was better news on the employment front, as unemployment claims easily beat the estimate.

  1. BOJ Monetary Policy Meeting Minutes: Monday, 23:50. The BOJ minutes will provide details about last week’s monetary statement, in which the BOJ stated that it was not changing its monetary course. Still, given the weak economy and feeble inflation levels, there is pressure on the BOJ to increase easing, so any hints in that regard in the minutes could push the yen lower.
  2. Consumer Confidence: Tuesday, 5:00. Consumer confidence is closely watched as the stronger consumer confidence usually translates into increased consumer spending, which is a key driver of economic growth. Given the weak economy, it comes as no surprise that the indicator continues to churn out readings below the 50-level, which indicates pessimism on the part of the Japanese consumer. The indicator improved slightly in August, posting a reading of 41.6 points.
  3. Preliminary Machine Tool Orders: Tuesday, 6:00. This indicator has been losing ground in recent months, and posted a sharp decline of 16.5% in August. Will we see any improvement in the September report?
  4. PPI: Tuesday, 23:50. This manufacturing inflation index has been posting declines in the second half of 2015, and posted a sharp decline of 3.2% in August, which was below expectations. The markets are bracing for an even sharper decline in the September report, with a forecast of 3.9%.
  5. Revised Industrial Production: Thursday, 4:30. There was no relief from this manufacturing indicator, which reversed directions in July and posted a decline of 0.8%, which was within expectations. The markets are expecting another decline in August, with the estimate standing at -0.5%.

* All times are GMT

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USD/JPY: Dollar Drops Against Yen After Retail Sales Figures

US investors were left disappointed today, following poor results in a retail sales report that came in below market estimates. Lows of ¥119.31 were seen today, with the dollar recovering somewhat to ¥119.88, showing bearish trends and breaking the symmetrical triangle continuation shown by the pair in recent months.

Prior retail sales figures were revised down and this has resulted in a weakening of the greenback, with retail sales expanding 0.1%, undershooting the initially expected 0.2%, although sales excluding the auto market have contracted more than the forecasted 0.3% down to -0.3% month-on-month.

Tomorrow will see the publication of inflation figures in the US and it is widely expected that this will show a period of deflation in September, as was the case in the UK and Germany. Falling commodity prices and a strong dollar continue to put pressure on inflation.

Consumer consumption has been a key proponent in the economic growth in the US, with consumption expenditures accounting for 70% of GDP. Sales at auto dealerships showed the greatest increase, rising to 1.7% from August's 0.4%.

Consumer spending has somewhat offset low exports figures, a strong dollar and low oil prices. Still, it is unlikely that the Federal Reserve will raise interest rates for the first time in almost a decade before the end of the year, and will hold off until early next year before thinking about a hike in rates.

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USD/JPY: Vulnerable Short-Term; Turning Bearish Here - BTMU

The dollar has just got a respite from the stronger than expected core CPI data from the US, which showed a surprising rise in the core annual rate from 1.8% to 1.9%, notes Bank of Tokyo Mitsubishi (BTMU).

"The key surprise element was rents which jumped to 3.1% for owner equivalent rents. This publication is going to print ahead of key Fed speeches, in particular from Vice Chair Dudley. This may change momentum notably but the dollar selling has been quite broad-based as expectations of Fed tightening gets pushed further back," BTMU adds.

"This may result in further yen strength over the short-term but we do not envisage a scenario of sustained yen gains. Lower levels in USD/JPY will likely result in a pick-up in capital outflows and with government-related entities likely to continue to be active in diversifying domestic assets into foreign securities.

But over the very short-term risks appear to be more to the downside," BTMU argues.

BTMU turns bearish on USD/JPY for the week ahead sees the pair possibility reaching 117.50.

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