USD/JPY Fundamental Analysis Jan. 23, 2012, Forecast

Close of the Asian Session

Economic Events: (GMT)

Chinese Markets are closed for the Lunar New Year

Jan. 22  18:50   JPY Trade Balance

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.

A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

19:30 AUD PPI (QoQ)

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

Jan. 23  22:00 JPY Interest Rate Decision

Bank of Japan (BOJ) policy board members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the JPY, while a lower than expected rate is negative/bearish for the JPY.

Analysis and Recommendation:

USD/JPY was trading 77.13 with the USD lower against the Japanese Yen on Friday

The pair seem to be in hibernation this week. What little life they have shown has been in reaction of EU, and the greenbacks overall market activity. The BoJ is scheduled to make a statement on Monday, but no changes are expected. The policy decision is forecast to be a hold.

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