USD/JPY Fundamental Analysis May 31, 2012, Forecast

Analysis and Recommendation: (close of Asian session)

The USD/JPY is trading at 79.47. This pair is stuck in a rut close to the 79.50 range as they battle it out for top safe haven flows. Yesterday, the USD staged a dramatic come back, as the greenback dropped throughout the day, as the euro and its cousins gained along with commodities. Mid day, Egan Jones added to the fiasco in Spain downgrading their credit rating, which turned the focus back to the banking sector in Spain. As the Prime Minister announced that Spain was facing some problems but would not require a bailout, as he outlined plans to fund Spanish banks through a complicated maneuver, which basically is a bailout in other terms.

Investors were not happy and ran for the hills, gold and crude oil dropped like lead balloons as the euro fell below 1.25 to hit a low of 1.2457.

Today will most likely continue to focus on Spain, as Greece is on the back burner until elections.

Rumors say that the EU Finance Ministers are already putting a plan together to rescue Spain, rumors also have been floated about backing from the ECB, but like Greece over the past few years these are just stories and rumors.

There are other problems brewing in Japan, as the strength of the yen continues to hurt exports, although the drop in energy costs has been a positive. The BoJ has been talking a lot lately trying to help support the economic situation.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data May 29 – 30, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

 

 

GBP

 

 

CBI Distributive Trades Survey 

21

 

-7 

 

-6 

 

 

 

 

EUR

 

 

German CPI (MoM) 

-0.2%

 

-0.1% 

 

0.2% 

 

 

 

 

EUR

 

 

German CPI (YoY) 

1.9%

 

2.0% 

 

2.1% 

 

 

 

 

USD

 

 

CB Consumer Confidence 

64.9

 

70.0 

 

68.7 

   

 

 

NZD

 

 

Building Consents

-7.2%

 

-10.0% 

 

19.8% 

 

 

May 30 

 

AUD

 

 

Construction Work Done

5.5%

 

3.0% 

 

-3.4% 

   

 

 

AUD

 

 

Retail Sales

-0.2%

 

0.2% 

 

1.1% 

   

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Date

Time

Currency

 

Previous

May 31

1:00

NZD

NBNZ Business Confidence

35.8

1:30

AUD

Building Approvals m/m

7.4%

1:30

AUD

Private Capital Expenditure q/q

-0.3%

1:30

AUD

Private Sector Credit m/m

0.4%

1:30

JPY

Average Cash Earnings y/y

1.3%

12:15

USD

ADP Non-Farm Employment Change

119K

12:30

USD

Prelim GDP q/q

2.2%

12:30

USD

Unemployment Claims

370K

13:45

USD

Chicago PMI

56.2

15:00

USD

Crude Oil Inventories

0.9M

23:50

JPY

Capital Spending q/y

7.6%

Jun 1

12:30

USD

Non-Farm Employment Change

115K

12:30

USD

Unemployment Rate

8.1%

12:30

USD

Core PCE Price Index m/m

0.2%

12:30

USD

Personal Spending m/m

0.3%

14:00

USD

ISM Manufacturing PMI

54.8

 

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