USD/JPY Fundamental Analysis April 3, 2012, Forecast

By FXEmpire.com

Analysis and Recommendation: (close of Asian session)

The USD/JPY has been climbing since early morning trading, as the yen continues to lose strength. Currently trading at 8305 the pair climbed as high as 83.30 before losing steam.

The Bank of Japan’s quarterly “tankan” business survey disappointed the markets and economists. The top category, covering major manufacturing firms, remained unchanged from December’s reading of -4, missing median expectations for a -1 result from surveys. A negative result indicates more pessimism than optimism among those surveyed. The large manufacturers expected conditions to improve just slightly in the current quarter, predicting a -3 reading for the next tankan in June.

On Sunday, the Chinese manufacturing PMI report got a mixed assessment onas the official survey for March improved to its highest in a year and a competing survey by HSBC showed the sector moving deeper into contraction.

The reported highlights showed:

• Reduced factory output reflects falling new business from home and abroad
• Manufacturing employment down at sharpest rate in three years
• Input price inflation ticks higher, but remains modest overall

Japan is a major trading partner with China and relies heavily on its income from this trade. The entire pacific is down today after negative sentiment has set in.

Economic Data Monday April 2, 2012 actual v. forecast that affects the NZD, AUD, and JPY

KRW	South Korean CPI (YoY)	2.6%	3.1%	3.1%
AUD	AIG Manufacturing Index	49.5	51.3
JPY	Tankan Large Manufacturers Index	-4	-1	-4
JPY	Tankan Non-Manufacturers Index	5	5	4
AUD	MI Inflation Gauge (MoM)	0.5%	0.1%
AUD	Building Approvals (MoM)	-7.8%	0.3%	1.1%
IDR	Indonesian Trade Balance	0.70B	0.93B	0.92B

Economic Calendar April, 3 2012 events that affect the NZD, AUD and JPY

02:30 AUD Retail Sales (MoM) 0.3% 0.3%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

05:30 AUD Interest Rate Decision 4.25% 4.25%

05:30 AUD RBA Rate Statement

Reserve Bank of Australia (RBA) 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. The Reserve Bank of Australia’s (RBA) monthly rate statement contains the outcome of bank’s interest rate decision and discusses the economic conditions that influenced the decision. It can also give investors clues to the outcome of future decisions.

19:00 USD FOMC Meeting Minutes

The Federal Open Market Committee (FOMC) Meeting Minutes are a detailed record of the committee’s policy-setting meeting held about two weeks earlier. The minutes offer detailed insights regarding the FOMC’s stance on monetary policy, so currency traders carefully examine them for clues regarding the outcome of future interest rate decisions.

Government Bond Auctions (this week)

Apr 03 09:30 Belgium Auctions 3 & 6M T-bills

Apr 03 09:30 UK Conventional Gilt Auction

Apr 04 08:30 Spain Bono auction

Apr 04 14:30 Sweden Details T-bill auction on Apr 11

Apr 05 08:50 France OAT auction

Apr 05 15:00 US Announces auctions

Apr 05 15:30 Italy Details BOT on Apr 11 & BTP/CCTeu on Apr 12

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Originally posted here