Japanese Yen reversal shape in the middle of divergence in policy Outlook on

Grundsätzliche Prognose für japanische Yen: Baisse
Der japanische Yen gegenüber dem U.S.-Gegenstück inmitten der stärker als erwartete BIP Bericht aus der weltweit größten Volkswirtschaft geschwächt, und die USDJPY kann weiterhin den Ausverkauf von Anfang dieses Monats nachvollziehen, wie die Federal Reserve Weg von seiner Lockerung Zyklus bewegt. Obwohl das FOMC allgemein erwartet, beizubehalten, daß ihre aktuelle Politik im August, die frische Charge der Zentralbank Rhetorik sein könnte, sollten die Spiel-Wechsler für die Dollar-Yen weiter der Ausschuss sich Spekulationen für eine neue Runde der quantitativen Lockerung zu sprechen.
Wie der Vorbericht 2Q BIP für die USA, die Aussichten für Wachstum und Inflation löst, die Fed weiterhin seine Tauben Ton für die Geldpolitik zu mildern und die Zentralbank kann über den Rest des Jahres ein Wait-and-See-Konzept unterstützen, wie politische Entscheidungsträger ein gedeckten Risiko für einen Double-Dip Rezession sehen. Im Gegensatz dazu, es scheint, als ob die Bank of Japan weiterhin auf seine Lockerung Zyklus als neues Vorstandsmitglied zu beginnen, die Takahide Kiuchi verpflichtet sich wird, neue Formen der monetären Unterstützung betrachten und die größere Abweichung in der Politik-Outlook kann eine Hausse Bewegung in die USDJPY Sporn, wie die US-Notenbank besser positionierten normalisieren Geldpolitik vor die BoJ bleibt. Jenseits der Zinssatz Entscheidung der mit Spannung erwartete US Non-Farm Payrolls-Bericht wird voraussichtlich Beschäftigung erhöht ein weiteres 100 K im Juli die 80 K-Expansion nach vorheriger Monat zeigen, und die schnellere Wachstumsrate Stelle kann letztlich eine sinnvolle Bewegung nach oben für die USDJPY produzieren, wie es Erwartungen für QE3 dämpft. Obwohl wir noch sehen verlaufenden Kanals nach unten in die USDJPY gerade, scheint die Baisse Dynamik als die relative Stärke Index Rebounds vor überverkauft Territorium spitz zulaufenden werden deaktiviert. Als Ergebnis der Dollar-Yen könnte setzen in einem kurzfristigen Boden wie wir in den letzten Tagen des Juli fahren, und das Paar für eine Hausse Breakout grundiert, sieht als die Fed bereitet wechseln Getriebe. -DS
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Japanese Yen Rallies After Bevy of Disappointing US Data

Japanese Yen Rallies After Bevy of Disappointing US Data
THE food: USD existing home sales (JUN) > 4,37 M (5.4%) compared to 4.62 M (+ 1.5%) expected from 4.62 M (0.0%) > USD leading indicators (JUN) > 0.3% vs. 0.1% expected by + 0.4% > USD Philadelphia Fed index (JUL) > 12.9 to 8.0 expected from 16.6 > EURUSD BEARISH
The news always worse for the U.S. economy, since a few months ago was world economy the favourite and is now only a further decay in the photo, the global growth. Three 'medium' importance (after the DailyFX economic calendar) data releases for the US economy have been released, disappointed by 10: 00 am EDT / 14: 00 GMT, and all three. Namely:
Existing home sales for June fell to an annual rate of 4,37 m from 4.62M, well-below 4.62 M pace expected. Sales fell by 5.4% over month while a gain of 1.5% was planned. Leading indicators for June shrank by 0.3%, faster than the 0.1% forecast fall in. The July Philadelphia Fed index improved, but remained the stretched compared to 8.0 expected negative to 12.9. The data come measures to improve the growth prospects at a crucial time, as the Federal weighs reserve more stimuli, but remain questions about what exactly is going to happen. Each Chairman Ben Bernanke was as made clear over the last two days half-yearly report on monetary policy to Congress, while the Federal can do more reserve, if necessary, the necessary structural improvements in the economy will come only through a prudent fiscal policy. To the United States ' said that fiscal policy is corrected, the US economy will continue to fight, no matter what does the Federal Reserve. USD/JPY 1 minute chart: 19 July 2012
Charts created using MarketScope prepared by Christopher Vecchio
Following the bevy of disappointing versions of the US dollar initially strengthened, the AUDUSD send lower from 1.0422 to as low as 1.0401, before recovering to 1.0417, which was written at the time of this report. The EURUSD behaved as well as diving from 1.2244 to 1.2230.
The big winner was the Japanese yen, as investors shed the US dollar as the play favorite safe haven: the AUDJPY fell from 81.97 to as low as 81.73; the EURJPY dropped from 96,27 to as low as 96.13; and the USDJPY fell to 78.52 of 78,64, before recovering to 78.57, at the time of this report was written.

Dollar,Breakout,Beginning

Dollar,Breakout,Beginning

12 July 2012 15:30 GMT

 Retail FX trading crowds are now nearly their most aggressively net-long the US Dollar (ticker: USDOLLAR) against the Japanese Yen since the USDJPY traded near record-lows in February. The sharp jump in crowd buying underlines the fact that most believe the Japanese Yen is unlikely to challenge fresh highs (USDJPY lows). The Japanese Yen nonetheless stands to strengthen as the Bank of Japan withholds further monetary policy stimulus and markets turn risk-averse.
The retail trading crowd is often ‘right’ at the turns; the SSI showed traders were their most net-long USDJPY on record as the pair bottomed in February. Yet current extremes could just as easily be a precursor for continued declines, and we remain bearish the US Dollar against the Japanese Yen on such one-sided sentiment.
How do we interpret and trade with the SSI? Watch an FXCM Expo Presentation that explains the SSI.

Current policy claims to appreciate Japanese Yen further as BoJ

AppId is over the quota
AppId is over the quota
Fundamental Forecast for Japanese Yen: Bullish

The Japanese Yen continued to appreciate against its U.S. counterparts as positive real interest rates in Japan increases the appeal of the low-yielding currency, and we may see the USDJPY track lower in the week ahead should the Bank of Japan preserve its current policy in July. Indeed, the BoJ is widely expected to uphold its zero interest rate policy, and there’s speculation that the central bank will continue to carry out its current asset purchase program as the board raises its outlook for the region.

Indeed, the BoJ raise its fundamental assessment of all the nine regions for the first time since October 2009 while presenting the quarterly Sakura Report and it seems as though the central bank will stick to its wait-and-see approach as economic activity starts picking up. Although Governor Masaaki Shirakawa maintained his pledge to purse ‘powerful monetary easing,’ it seems as though the central bank is becoming more upbeat towards the economy as the recent developments coming out of the world’s third-largest economy raises the prospects for future growth. Meanwhile, the Nikkei newspaper said that the BoJ may scale back on its 6-month operation and expand its shorter-term programs, but the central bank may see scope to inject additional liquidity into the system as the ongoing turmoil in Europe dampens the outlook for the world economy. BoJ Deputy Governor Hirohide Yamaguchi held a cautious tone while speaking in Tokyo earlier this week and said that excessive gains in the local currency would dampen private sector activity, and we may see the central bank try to talk down the Yen as it lowers the scope for an export-led recovery.

As the USDJPY threatens the ascending channel carried over from June, a close below the 20-Day SMA (79.56) would instill a bearish outlook for the pair, and the dollar-yen may continue to give back the rebound from 77.65 as the relative strength index fails to maintain the upward trend from the previous month. However, we may see the dollar-yen face sideways price action ahead of the rate decision as market participants weigh the outlook for monetary policy, and the outcome of the rate decision should generate a clearer picture for the USDJPY amid the mixed views surrounding the BoJ. - DS

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Current policy claims to appreciate Japanese Yen further as BoJ

Fundamental Forecast for Japanese Yen: Bullish
The Japanese Yen continued to appreciate against its U.S. counterparts as positive real interest rates in Japan increases the appeal of the low-yielding currency, and we may see the USDJPY track lower in the week ahead should the Bank of Japan preserve its current policy in July. Indeed, the BoJ is widely expected to uphold its zero interest rate policy, and there’s speculation that the central bank will continue to carry out its current asset purchase program as the board raises its outlook for the region.
Indeed, the BoJ raise its fundamental assessment of all the nine regions for the first time since October 2009 while presenting the quarterly Sakura Report and it seems as though the central bank will stick to its wait-and-see approach as economic activity starts picking up. Although Governor Masaaki Shirakawa maintained his pledge to purse ‘powerful monetary easing,’ it seems as though the central bank is becoming more upbeat towards the economy as the recent developments coming out of the world’s third-largest economy raises the prospects for future growth. Meanwhile, the Nikkei newspaper said that the BoJ may scale back on its 6-month operation and expand its shorter-term programs, but the central bank may see scope to inject additional liquidity into the system as the ongoing turmoil in Europe dampens the outlook for the world economy. BoJ Deputy Governor Hirohide Yamaguchi held a cautious tone while speaking in Tokyo earlier this week and said that excessive gains in the local currency would dampen private sector activity, and we may see the central bank try to talk down the Yen as it lowers the scope for an export-led recovery.
As the USDJPY threatens the ascending channel carried over from June, a close below the 20-Day SMA (79.56) would instill a bearish outlook for the pair, and the dollar-yen may continue to give back the rebound from 77.65 as the relative strength index fails to maintain the upward trend from the previous month. However, we may see the dollar-yen face sideways price action ahead of the rate decision as market participants weigh the outlook for monetary policy, and the outcome of the rate decision should generate a clearer picture for the USDJPY amid the mixed views surrounding the BoJ. - DS

Japanese Yen looks vulnerable in the wake of the Summit. It will last?

Fundamental forecasts for the Japanese Yen: neutral
The Yen had a week relatively strong, finish as the third best performer behind the Australia and New Zealand $. Despite the large gathering risk Friday, the Yen was able to exceed the Dollar of the United States, where it acquired more than 0.78% against. Indeed, the week better sought the Yen before Friday, he became a gesture widely accepted (by this analyst included) that the Summit of the Euro area, would be substantive measures little, if any, to stem the crisis at its roots. And while we believe that this will be the case - that the markets would measures of the Summit as "not enough": the combination of a clarity out of Europe, the end of the month and the end of the quarter was enough to see that the Yen dumped for the currencies of performance more high and correlated with the risk of the assets.
Beyond the Summit and move to some wild speculation before the usual discussion of the economic role of this week, the price today action is strangely similar to the day to the top of the zone Euro concluded in October 2012. In fact, if November 30 is not considered, the Australian Dollar and the Euro had their performance stronger from that day - and then markets subsequently fell into a spiral through the first weeks of three and a half of November.
Similarly, the so-called "pause" to the crisis created an air of feeling this appetite for risk would be abundant, at least for a few days. And with the weakening Yen, then as it did today, officials at the Bank of Japan intervened in markets October 31, 2011, for the period of "calm" to weaken their currency. Even if it is a remote and largely unknown possibility, there is little reason to believe that a more moderate BoJ wouldn't do the same thing in the next few days.
With respect, we find that a rate BoJ decision comes in the second week of July. To come from this meeting, however, there are a few pieces of data on the record which could influence the BoJ when they convene. Broadly speaking, there are two days, what matters this week of the Japanese Yen in terms of risk of the planned event: Monday and Friday.
On Monday, Tankan survey second quarter are the and they expected you to show an image of competing for the sectors of manufacturing and non-manufacturing of the Japanese economy growth. While large manufacturers Tankan index is expected to remain on hold at-4, Outlook should fall to-4 to-3 in the first quarter, according to a Bloomberg News survey. On the reverse, the Tankan Non manufacturing index is expected to increase from 7 to 5, and the prospects are expected to improve to 6-5. Overall, this should be slightly positive round of polls Tankan, which might deter the BoJ to act at its meeting the week after.
Friday, two smaller versions are due, but they nevertheless deserve to be. The preliminary may coincides and indexes that are due, and both are expected to show the erosion of the views of the economy. The coincident Index, a composite index of indicators of the economic cycle, is expected to show a drop to 95.7 of 96.9 in April. Similarly, the main Index, a composite index of twelve key indicators of the economy Japan and is expected to decrease from 95.6 to 95.0.
Thus, what we are seeing here is a mix but distorted the image of the decline of the Japanese economy by the various data due this week. When one considers the sum, they may be sufficient to start the speculation about the BoJ do something more accommodating at their meeting next week. And while these are considerations strongly downward, we always believe them that results of the Summit of the Euro area will be low, so the rise of the Yen is broadly neutral with the prospect of a significant and rapid change for security at any time in the near future. -CV

@Japanese yen seems to us data, Summit of the leaders of the EU Directorate

 23 June 2012 01: 57 GMT   Fundamental Forecast for Japanese Yen: Mixed
The Japanese Yen sits at the cross-currents of major themes driving financial markets in the week ahead. The currency's benchmark pairing against the US Dollar continues to show a strong correlation with 10-year US Treasury yields (on 20 - day percent change studies). Meanwhile, the crosses continue to track closely with risk sentiment trends, as tracked by the MSCI World Stock Index. This exposed the Japanese unit to the evolving threat of structural instability posed by the lingering Eurozone debt crisis as well as strengthening headwinds facing global economic performance.
On the growth front, the focus remains on the United States. The Eurozone is widely expected to have entered recession at this point, and leading economic data certainly seems to support that view. That has translated into a slowdown in Asia, which depends on Western Europe for a large chunk of export demand. That pine investors' hopes on the US and the ability of a fragile and uneven recovery to offset the malaise elsewhere. This puts the spotlight on the June set of survey data as the timeliest gauge of activity in the world's top economy.
Manufacturing activity surveys from the Dallas, Richmond and Kansas City Fed branches are due to cross the wires next week, with mixed results expected. The Chicago PMI and Consumer Confidence readings are also on tap. With the Fed opting not to re-launch quantitative easing at last week's FOMC meeting, soft outcomes threaten to spark risk aversion and send Yen crosses lower along with stock prices. USDJPY is likewise vulnerable in the event that haven demand using Treasury bond prices and yields, but fading QE3 hopes and sinks a parallel pickup in safety-seeking flows into the US Dollar are likely to see the hand relatively better insulated from Yen strength than elsewhere.
Feeling can likewise falter if Eurozone officials' efforts to rein in the debt crisis and boost growth once again disappoint financial markets. Event risk heats up toward the end of the week you have had leaders hold a two day summit while the German Parliament holds a vote on the tax compact treaty. Global leaders put heavy pressure on their European counterparts to step things up at last week's G20 sit-down. With that in mind, traders will look for operational details of new policies to emerge from the summit. Possible initiatives include a banking union based on a region-wide deposit insurance scheme. Details of a €125 billion growth-boosting effort announced after German, Italian French and Spanish heads of state met in Rome on Friday will also be sought.

$$Japanese Yen led to the approach of risk significant event - look gross

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By Christopher Vecchio, analyst of currency 13 June 2012 14: 09 GMT basic titles
-Choice of the European destiny of the Merkel pits against the interests of German voters - Bloomberg
-Battles of Rajoy ECB of loans; Monti calls to Action of the EU - Bloomberg
-When Romney not so tough on China - Reuters
-Dimon foul controls on the risk - WSJ
-Pressure monte for Monti the Italy-WSJ
Summary of Asian and European Session
High and correlated with the active risk turned higher beta currencies at the end of yesterday U.S. session and in the demonstration continued throughout the Asian session on Wednesday. While the broader market a slight drop in Asia at the beginning, they have rebounded with a fervor in Europe and that was about it. No there was no big moves or outliers in FX, and as such, it is a very confusing image. While the New Zealand Dollar was brought to the rally past two weeks and continues to lead in the night, which piqued my interest is that the Japanese Yen has stabilized and appeared alongside the Kiwi as top interpreter.
In part, the rise of the Yen force is today because bad exceptionally data out of the United States which suggests the basic consumer weakens (long-argued in this column as the wage growth did not follow the pace of inflation) and that deflation can be implemented. Contracting of advance retail sales may alongside signs of deflation in the producer price index have established trade there in the short term, if only temporarily, with the USDJPY falling on the side of a place in gold. A deeper look at the data suggests that it is not the case, however, given that the main reason for the decline in the two reports is due to the decline in the price of oil.
Contrary to popular belief, deflation in oil is an event hailed, it down the costs of production of the finished products, which reduces their cost as well. It is widely publicized that the Federal Reserve takes a position anti-deflation, but what is more appropriate and what makes some appropriate deflation, including in the base rate, that is growth in wages over the past months has not kept pace with inflation. If the wage growth continues to trail, will introduce income and which, ultimately, is the greatest threat to the American economy.
The Dollar faded slowly these days, but the reappearance of the rise of the Yen is now referring to recital (new) which is coming on the record in the next few days. The Swiss National Bank meets tomorrow to their political quarterly meeting; The euro area and us inflation data is due; the Bank of the Japan meets Friday; and the second Greek election takes place Sunday. Given the expected results of these events - relaxation more considered short-term and disappointment in Greece - action price today by the Yen and more importantly, crude oil (sitting to $ 82.40/brl at the as of writing), asserts that this aversion to risk-is just around the corner.
Take a look at credit, Italian and Spanish credit deteriorate once again, with their respective yields 10-year note amounting to % and % 6.715 6.215. Stress is more apparent on the short end of the curve, with performance in Italian 2-year note passing 20, 9-base points to 4.678% yield.
USDJPY 5 min chart: 13 June 2012

Graphing with Marketscope - prepared by Christopher Vecchio
The Japanese Yen is the top performer, WINS 0.19% on the day against the US Dollar. Similarly, the New Zealand Dollar is 0.18 per cent more. The Euro and the Swiss Franc are poorly against the US Dollar, won 0.17% and 0.19%, respectively. The pound sterling is the worst performer, with the GBPUSD 0.16 per cent Wednesday so far.
24-Hour price Action

4-Hour Price Action

 Main levels: 14: 05 GMT

So far, on Wednesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is low, trade 10172.30 at the time when this report was written, after opening at 10181.47. The index traded mostly lower, with the high in the 10196.09 and the 10161.52 low.

¥ Japanese Yen Shocked by Essentially Expected BoJ Stimulus Expansion

Dollar Breaks Down from Two Month Range, Little Follow Through Euro Takes an Unexpected Jolt from Surprise Spain Downgrade Japanese Yen Shocked by What was Essentially Expected BoJ Stimulus Expansion British Pound Grinds Out its 9th Daily Advance, No 10-Day Runs in Past Decade New Zealand Dollar Will Start Coming Under Pressure as Market Fears Rate Cut Swiss Franc Pressured Once Again by Spain’s Financial Troubles Gold Enjoys its Biggest Jump in Two Weeks on Dollar’s Drop, BoJ Pump Dollar Breaks Down from Two Month Range, Little Follow Through
We have seen many false breaks and false starts this past week, and the dollar seems to have jumped on the bandwagon as well. Having worked its way into the most congestive pattern seen in over a year, the Dow Jones FXCM Dollar Index was finally forced to choose a direction. And, choose it did a bearish break below 9900. However, just like every other exciting price development we have seen in the FX and capital markets this past week, the greenback’s bearish ambitions dried up almost immediately after the move was made. That said, the slow drift was nevertheless supported by the equally strained fundamentals. Risk appetite trends measured in the S&P 500 overtook resistance on the past two weeks’ congestion. Strength behind the ‘risk on’ run was just as anemic as the fallout from the FOMC decision Wednesday.
The disconnect for meaningful drives in the currency and capital markets isn’t the quality of the fundamental developments we’ve absorbed – especially not this past week. Rather, the trouble is in the general lack of participation we have seen from speculative masses. It is difficult to offer a good measure of participation in the FX market, but we can refer to the long-anemic level of turnover in other benchmark assets (like the S&P 500). A very interesting measure for currency traders though is the FX market volatility index (CVIX) which shows expected activity levels (over the next three-months for those looking for specifics) is at its lowest level since August 2008 – at 9.27 percent. Freely traded markets do not tolerate extremes for long. Though, when manipulation is as common as daily rollover, the abnormalities can last a little longer…
Looking ahead to the final New York session of this trading week, we have another opportunity for major event risk to finally spur some conviction to this painful, schizophrenic volatility. Compared to the Fed’s rate decision earlier this week, the impact potential of the 1Q US GDP report seems far more restrained. The market’s have already been tempered to a slowdown in economic activity globally with the UK recession, lowered European forecasts and moderated expectations for Asia. Perhaps there is some holdout value for the US to rise above it all. If that is a consensus belief, a disappointment could change a lot of expectations and thereby positions. That said, I’m skeptical.
Euro Takes an Unexpected Jolt from Surprise Spain Downgrade
We were given a clear lesson in just how effective fundamental catalysts can be if the markets are caught off guard. This past week, we had to leverage very heavy event risk to squeeze out a moderate level of price action. Yet, on Thursday, an unexpected Standard & Poor’s downgrade of Spain from A to BBB+ drove both the euro and equity futures lower in normally quiet market conditions. Follow through was limited, but that is generally the cut of the market. Nonetheless, we have seen from the market’s reaction to the Spanish downgrade, that there is serious concern that another country has taken over as the top regional concern (until Greece wants to reclaim the crown with its election). This is a good effort to leverage the situation for a potentially bigger drive next week considering we have first quarter Spanish GDP numbers on Monday.
Japanese Yen Shocked by What was Essentially Expected BoJ Stimulus Expansion
We witness some incredibly unusual and choppy price action from the Japanese yen this morning in reaction to the Bank of Japan’s policy decision. There was a fully formed consensus on what would happen with this event – the central bank would fold to government pressure and increase its asset purchases by 5 to 10 trillion yen. The details may have confused some, but the general outcome fit that profile. The central bank actually increased its asset purchase plan by 10 trillion yen (to 40 trillion). They would also extend the program by six months, reduced the credit loan program by 5 trillion yen, extended the JGB maturity targets from 2 to 3 years and maintained the 1 percent inflation target. Back in February, a similar move instigated an incredible USDJPY trend reversal. Now, it barely boosts volatility. The BoJ has been rendered impotent.
British Pound Grinds Out its 9th Daily Advance, No 10-Day Runs in Past Decade
With Thursday’s close, cable (GBPUSD) won its ninth consecutive advance. We have seen runs of similar consistency back on January 19, 2011 and August 3, 2010. Aside from these instances, the past decade is clear of such momentous drives; and there haven’t been any 10-day runs over that period. What does that tell us, the sterling is very likely looking at a correction. That said, the 2.1 percent run to this point is far more restrained than the previous drives 3.4 percent move. Further, these markets aren’t prone to momentum. It could be a lackluster pullback.
New Zealand Dollar Will Start Coming Under Pressure as Market Fears Rate Cut
The FX market seemed to completely ignore the neutral shift in the RBNZ’s policy tone this past week, but we are starting to see its after effects in the interest rates market. According to interest rate swaps, there is a 20 percent probability of a quarter-percent rate cut at the next meeting. Furthermore, the 12-month rate forecast is calling for 6 bps of easing. That may seem modest, but it is the most dovish forecast we have seen in three months. Back in the early days of the Aussie rate shift, the reaction was slow. If global conditions slow, the kiwi could follow the same path.
Swiss Franc Pressured Once Again by Spain’s Financial Troubles
The Swiss National Bank has very few options available to further its effort to devalue the franc. The optimal situation for the group would be for a natural recovery in growth and financial conditions for the Euro-area which curbs the safe haven outflow that directs capital directly to the Swiss banking sector. That looks unlikely as we keep jumping to the next issue for the region. The current approach of unlimited euro purchases will no doubt have a cost limit, and Spain’s downgrade has ratcheted up the spending. What will it take for them to lift the floor or issue curbs?
Gold Enjoys its Biggest Jump in Two Weeks on Dollar’s Drop, BoJ Pump
A key tumble for the US dollar offered gold a spring board for its biggest rally in two weeks. The three-day run the metal is impressive in binary terms only. This commodity is lacking for momentum as surely as its fiat counterparts. Though gold is a safe haven and ideal alternative to inflated stimulus regimes; if there is no follow through on currencies or risk trends, it is unlikely that the metal will gain any additional traction. Watch for any risk trend impact to the upcoming US GDP reading. Without it, gold will likely limp into the weekend.
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**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar
ECONOMIC DATA
Next 24 Hours
All eyes to be on whether BoJ increases asset purchases for the second time this year
HIA New Home Sales (MoM) (MAR)
Industrial Profits YTD YoY (MAR)
Could be affected by broader Chinese economic slowdown
MNI April Business Condition Survey
Vehicle Production (YoY) (MAR)
Construction Orders (YoY) (MAR)
Annualized Housing Starts (MAR)
Expected to remain near highest level since 2007 on robust labor market
GfK Consumer Confidence Survey (MAY)
Expected to reflect ongoing trend of easing price pressures in Eurozone
Import Price Index (MoM) (MAR)
Import Price Index (YoY) (MAR)
Likely to remain depressed on high unemployment
KOF Swiss Leading Indicator (APR)
Effects of Monti government’s austerity measures still strong
US GDP and consumption figures expected to show steady economic recovery; could further weaken the case for additional monetary stimulus measures
BoE’s Tucker Speaks in Brussels
SUPPORT AND RESISTANCE LEVELS
To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal
To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table
CLASSIC SUPPORT AND RESISTANCE –EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT
INTRA-DAY PROBABILITY BANDS 18:00 GMT

¥ Japanese Yen Undecided following Ho-Hum Trade Data

THE TAKEAWAY: Merchandise Trade Balance Fell to -¥ 82.6 Billion from ¥ 29.4 Billion > Traders Trader Reaction Muted as Improving Export Data Was Neutralized by a Jump in Imports > USDJPY Traded Sideways.

Data released by the Ministry of Finance and the Customs Office showed that the merchandise trade balance in February fell to -82.6 billion Yen from 29.4 billion Yen. The figure surpassed the -223.2 billion Yen deficit that analysts expected. Additionally, trade exports rose 5.9 percent on the year, beating the 0.2 percent increase forecasted and improving upon the 2.7 percent decline the prior year.

The figures painted a rosier than expected picture of an export-dominated Japanese economy and jumped on bears who forecasted a smaller increase in the country’s export sector. Though the data was tempered by a 10.5 percent increase in imports, which passed the 7.0 percent expected, the export figure did show the market that Japanese exporters were not faring as poorly as analysts thought.

Exports performing better than expected detracted from evidence that the Bank of Japan would ramp up its stimulus efforts in the near future. However, unexpectedly high import data suggested the opposite.

After the data was published, traders initially bought USDJPY, pushing it down from ¥81.296 to ¥81.160, but quickly sold their positions, leading the Yen up to ¥81.300. The currency pair continued to trade sideways in the minutes following the release.

Japanese Yen Strength to Fizzle Amid Growth Fears, BoJ Pledge

 

Currency Analyst 14 April 2012 04: 19 GMT 

Fundamental Forecast for Japanese Yen: Neutral

The Japanese Yen extended the advance from earlier this month as the Bank of Japan stuck to its current policy in April, but the low-yielding currency may struggle to hold its ground next week as the economic docket is expected to cast a weakened outlook for the world's third-largest economy. As market participants see the adjusted trade deficit widening in March, the weakening outlook for growth could heighten expectations for additional monetary support, and we may see Japanese policy makers talk down the Japanese Yen in an effort to stem the risk for deflation.

Although the BoJ refrained from taking additional steps to shore up the ailing economy, central bank Governor Masaaki Shirakawa pledged to 'pursue powerful easing' just days after the rate decision, and said that the board will cooperate with the government to combat the risk for deflation. At the same time, the policy meeting minutes showed a push for increased purchases of Japanese Government Bonds (JGBS) as the board works to complete its asset purchases on schedule, and the dovish tone held by the BoJ continues to cast a bearish outlook for the Yen (USDJPY bullish) as the central bank pledges to carry out its easing cycle throughout 2012. As Governor Shirakawa is scheduled to speak next week, the central bank head may make attempt to talk down the Yen further, and we will preserve our bullish call for the USDJPY amid the shift in the policy outlook. As the Federal Reserve looks to bring its easing cycle to an end, the divergence in central bank policy should continue to prop up the dollar-yen, and we expect even the resume the upward trend from earlier this year as market participants see the FOMC raising the benchmark interest rate off the record-low over the next 12-months.

As the USDJPY continues to find interim support around the 50.0% Fibonacci tracing from the 2010 low to the 2011 high (76.00), the pair appears to be building a short-term base for a move higher, but we will keep a close eye on the relative strength index as it maintains the downward trend carried over from the previous month. In turn, we will wait for a bounce in the RSI to reinforce our bullish forecast for the dollar-yen, and we should see another run at 25.00 amid our projections for fresh yearly highs in the exchange rate. -DS

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14 April 2012 04: 19 GMT

> Aussie leads after data of the work while the Japanese Yen and the US Dollar fight

Fundamental headlines

-Decrease in deposits at its lowest since 2007 U.S. foreclosure - Bloomberg

-Yellen said jobs Outlook accommodating political mandates - Bloomberg

-Silent guns in the hours after the truce of Syria - Reuters

-Italian short term results - WSJ

-Will be the Inflation Kill there hopes? -WSJ

Summary of European Session

In recent weeks, the sense of global investors has eroded for two main reasons: the eurozone sovereign debt crisis. and the slowdown in China's growth. The currency which has been influenced the most by these events has easily been the Australian Dollar. Since March 1, the Australian Dollar was the main currency of less powerful, loser 3.10% to the US Dollar; This performance looks particularly brutal from the relatively strong performance by Canadians and the NZ $ in the same image, when they have only lost 0.98% and 1.31% against the US Dollar, respectively.

That these concerns, the Australian Dollar in circulation have accumulated, expectations of lower rates have soared in recent weeks, with the credit Switzerland Overnight Index Swaps suggests (as recent as yesterday) a chance to 97.0% a rate at the next meeting of the Australia Reserve Bank. Primarily, policymakers expressed concerns in a housing market deflate, price pressures, cooling and the labour market recently struggling.

The release of labour market last night has certainly facilitated some of the concerns of the decision-makers of the RBA. Not only data rash printing - 44.0 k actual versus 6.5 k scheduled - but partial picked up immensely, usually a sign that firms seek to expand their work forces (it is usually a precursor to employment full time).

For today, with decision makers to be a little less concerned about the economy - also marked less than 5.2% unemployment rate - rate cut expectations have decreased considerably, with the credit Switzerland ISB now showing a 82.0 percent chance of a rate of 25 points, 0-base cut at the next meeting of the RBA. The Australian Dollar has responded accordingly, surging against the lower yield currencies, the Japanese Yen and the US Dollar, levels tests key technical against him that would justify a change in medium-term exchange rate forecasts.

Take a look at credit, the market players continue to push the debt of periphery of the Euro zone after the comment by Benoit Couere who suggested that the ECB could resume to buy Spanish debt, Member of the Board of the Central Bank European. The periphery debt responded positively, the yields of 10 Italian years and falling Spanish 5.390 and 5.781%, respectively.

AUDJPY 5 min chart: 12 April 2012

Graphing with Marketscope - prepared by Christopher Vecchio

Overall, the Australian Dollar was the best performance of the major currencies, gaining 0.85% against the US Dollar. Products and European currencies were strong overall, with Canadians and the NZ $ 0.38% and 0.48% respectively, while the Euro firmed by 0.23% against the Dollar but two sessions Thursday. The Japanese Yen has been the worst performer, down 0.06%.

24-Hour price Action

Key levels: 13: 55 GMT

So far, on Thursday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is low, trade at 9938.80 at the time when this report was written, after opening at 9968.85. The index traded only lower, with the high in the 9968.92 and the 9922.03 low.

++ Japanese Yen Rebound Could be Limited with BOJ Set to Meet ++

Christopher Vecchio, Currency Analyst 07 April 2012 00:42 GMT

Fundamental Forecast for Japanese Yen: Neutral

• Dollar Rally vs Yen May be Ready to Resume
• Japanese Yen Surges against U.S. Dollar Following Dismal Jobs Report
• USDJPY Classical Technical Report

Fundamental Forecast for Japanese Yen: Neutral

The Japanese Yen had a strong week, gaining 1.63 percent against the U.S. Dollar yielding it high marks as the top performer in the first week of April. The bulk of the Yen’s strength came on Friday, when the U.S. nonfarm payrolls report indicated slower job growth than expected, sending Treasury yields plummeting. While the data alone would support a stronger Yen come market open next week, there are a number of data and events on the calendar that temper our bullish Yen enthusiasm for the time being.

In terms of market moving data, three pieces stick out for having the most potential to influence the Yen for the remainder of the month. Ahead of market open on Monday, Japanese trade figures are due, and the weaker Yen appears to be paying dividends for the economy. According to a Bloomberg News survey, the Japanese trade balance is expected at ¥104.3 billion. While a surplus would be bullish for the Yen, it is likely that Japanese officials will look for a sustained surplus going forward before declaring that the Yen is no longer overvalued. A worse than expected print could prompt officials to discuss further steps to weaken the Yen going forward. Along similar lines, machine tool orders for February are expected to have jumped relative to the same period last year; expanding production could be aiding the expected trade surplus.

Taking a step back, on Wednesday, the Eco Watchers surveys for March should give some greater insight into the direction of the Japanese economy. Both the current situation and outlook gauges have improved recently, and another reading over 50.0 for the outlook survey would be the first time since April and May 2007 that there have been two consecutive readings above 50.0.

Also on Wednesday the Bank of Japan is set to meet. At their February meeting, the BoJ decided to inject ¥10 trillion ($128 billion) into the markets to help stimulate the economy and weaken the Yen. It has worked thus far; the USDJPY traded at an 11-month high in mid-March. There’s been chatter that the BoJ could move to weaken the Yen further at the coming meeting, and a weak trade balance figure could give scope to such a move. Unannounced interventions (like the October 31 operation) are likely behind the BoJ given the Yen’s weakness this year, but further steps are likely to be taken if the Japanese economy’s pace of growth does not accelerate in the coming weeks. With the BoJ looming overhead, our bias for the Yen this week is neutral/sideways; without the BoJ and in light of seasonal trends and data due, our forecast for the Yen would be bullish. – CV

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07 April 2012 00:42 GMT

Will the Weakness in Japanese Yen Continue?

Since the first day of February this year, the Japanese yen has continued its slide against most major currencies; offering a trend of weakness in the currency that has been seen only one other time since beginning of 2010. This article will examine the specifics of what is changing in the Japanese economy, and how Forex traders might be able to use this information in deciding an approach on ¥-based pairs.
In the article How a Currency can Change the World, we examined the effects of a currencies’ appreciation on a heavy export-based economy, and we saw that the effects can be damaging; potentially changing the prospects of an entire nation.
From mid-2007 until early this year (before February 1, 2012), we’ve seen the USDJPY currency pair move from over 120.00 to 80.00; A gain of 33% in the Yen against the US Dollar.
 Created with Marketscope/Trading Station
As we examined previously, this means that exports are less profitable; making Japanese products more expensive on a relative basis to competing goods made in economies with weak currencies (like the United States). Price conscious consumers begin making other purchasing decisions; instead choosing to buy Chevrolet or Volkswagen, because Honda just isn’t as affordable.
The alternative for Japanese companies is to absorb the hit of the strengthening currency; which can mean that Japanese stock prices would be affected. We’ve seen an element of this too, as evidenced by the JPN 225 CFD (mirroring the Nikkei index).
 Created with Marketscope/Trading Station
The consequences of such a movement can be enormous, and the Bank of Japan has made numerous attempts to intervene in markets to weaken the Yen.
While the efforts would generally offer a bout of short-term relief, the strength in Yen eventually came back to continue to drive the currency to all time highs against the US Dollar (this would be lows on the USDJPY currency pair as Yen is the counter currency in the pair).
When the Tohuku Earthquake and Tsunami ravaged the country of Japan, worried investors repatriated Yen at a breath-taking rate.
One might imagine that an event as severe as the events that transpired would equate to weakness in a currency?
In Japan, where rates were left extremely low for an extended period of time, Japanese investors became accustomed to investing in foreign markets to receive a better rate of return. After capital had flowed out of the economy for so long, such an event equates to the concept of ‘Yen Repatriation.’ This is when investors bring their Yen back into Japan out of fear. As those investors buy back Yen, this serves to push the price higher.
In the case of the Tohuku Earthquake and Tsunami, with the Fukushima disaster following shortly thereafter; we saw an extreme case of Yen repatriation, pushing the Yen to a new all-time high against the US Dollar.
 Created with Marketscope/Trading Station
At this trying hour for the nation of Japan, the G-7 nations stepped in an unprecedented manner to intervene in the currency; weakening the Yen over 500 pips against the US Dollar.
Unfortunately this only offered short-term relief, as investors eventually bid the Yen higher over the course of the next 4 months; once again, establishing a new all-time high against the US Dollar.
But something strange happened during the month of February. The Yen began weakening, and hasn’t yet stopped. This is much different than the previous bouts of Yen weakness seen in markets. This time we’ve seen resistance levels getting taken out as the currency continues to weaken.
Is it really different this time?
While it is still too early to say that this most recent bout of Yen weakness will initiate any longer-term trends, there are elements of change that could serve as optimism for the people of Japan.
Much of this change seems to be spurned by the inauguration of a new Prime Minister: Yoshihiko Noda, who was previously the Finance Minister of the Bank of Japan.
After taking over after the resignation of previous Prime Minister Naoto Kan (who had also functioned as Finance Minister of the Bank of Japan previous to his administration), Noda made one of his first items of business to announce the inclusion of Japan to the Trans-Pacific Strategic Economic Partnership. Through the partnership, member countries would enjoy free trade relationships with a host of other nations. Although Japan has not formally entered negotiations to the partnership this has served to be a controversial topic in Japan.
Noda also ushered Japan to a new form of currency intervention. In November, the Japan Bank for International Cooperation began a program of offering cheap US Dollar based loans to Japanese companies to make foreign acquisitions of companies or resources.
The program was introduced in August of 2011 as the ‘Emergency Facility to Deal with The Strong Yen,’ and offers to finance a portion of deals for Japanese firms purchasing assets outside of the country. This has led to a Merger and Acquisition boom for Japanese companies. And due to the fact that the JBIC is only financing a portion of these deals (60% financed for Japanese firms to buy foreign companies, 70% for Japanese firms to buy foreign resources), this has helped motivate capital outflows from the country; further weakening the Yen.
Upon boosting the Asset Purchase program in Japan yet again on February 14th, Yen weakness appeared to accelerate.
Where does the Yen go from here?
The answer to this question is likely contingent on an even bigger question of global economic growth.
If the global economy continues to improve, this could allow for additional weakness in the Yen, much like what was seen in markets throughout 2005 to the 3rd quarter of 2007, in which we saw the USDJPY currency pair move from the psychological support level of 100.00 up to 120.00; a loss of 20% for the currency.
However, if the European debt situation rears its head again, or if Chinese economic data continues to show signs of slow-down in the economy, we can easily see a re-emergence of Yen strength, with tests of all-time highs (lows in the USDJPY currency pair).

OpenBook traders attention to Japanese Azumi

3 February, 11: 57

 The Japanese Minister of finance, Jun Azumi warned markets today on the strengthening of the Yen, as a trade USDJPY dangerously close to 76.00. Azumi, stated that the current environment of low rates of interest in the United States grows speculators to short the USDJPY. He said that the rise of the yen has a back and he is ready to take decisive action to put an end to the increase. Once more, he noted that the Yen strengtheni of the market and take appropriate action." There is no change in my position. If there is unilateral mng is not the fundamentals of the Japanese economy. Azumi, stated, "I closely watch the movementsovement, I'll take decisive action. "Despite his comments, the USDJPY was unchanged and trading as low as 76.18 at the time of the drafting of this report.
OpenBook merchant mizogutisennri, who is also of the Japan has been exchange on both sides of the Yen. For the past two days, the trader was short the USDJPY, EURJPY and AUDJPY and taking advantage of the break in close support of 76.50. This merchant has obtained 50% to 70% of earnings by shorting these pairs. However the comments of Azumi satisfied this merchant to pass its short positions for a long time on the pairs. The trader has reserved certain benefits by going on the USDJPY today near 76.36. This merchant is up 21% so far this week.
Asian markets ended mixed on the day of broadcast non-firm data mass pay important. The Japanese Nikkei ended down 37 points, the Hang Seng ended 18 points, Shanghai index ended up 19 points and the Australian ASX S & P ended on 13 points. The OpenBook merchants are mainly long on USDJPY with limits of averader Nimfo07 which is an impressive 20.2% has been trading the EURJPY and GBPJPY USDJPY. This ges to 77.50 and stops to 76.00.OpenBook tratrader used medium risk strategies this week to press on average 10% of the gains on the Yen pairs. Dealer closed several positions in the profits today after the recent comments that the Azumi Japanese Finance Minister. This merchant has opened several long positions on USDJPY near 76.13 and out near 76.20 with gains also high that 11.8%. The operator has also obtained some quick profits goes long on GBPJPY approximately 120.51 and EURJPY around 100.08 earlier today. This merchant is attention to Azumi comments and short circuit of the Yen.