The USD/JPY pair ended last week with losses, where the Japanese yen dominated the pair’s movements and drove the pair down to its post-war levels. The BOJ’s stimulus and the European summit didn’t affect the pair, and it continued to advance versus the weak dollar despite the improvement in the sentiment.
The EU second crisis summit held in Brussels showed that the EU leaders will increase the European Financial Stability Facility by 1 trillion euro, in addition announced 50% haircut of Greek bondholders.
On the other hand, the BOJ kept the interest rate steady near zero level, in addition to expand the asset-purchase fund by 20 trillion yen and the credit-loan program to 55 trillion yen.
The Japanese yen retreated against European currencies but it held its gains against the dollar, since greenback dropped against other major currencies with the return of confidence to financial markets after the EU announcement.
The BOJ didn’t intervene till now in the FX market, but the bank indicated that the current currency levels in addition to the EU debt crisis are hurting the Japanese economy, which kept uncertainty into the yen’s trading
This week we need to focus on the G20 meeting as the Japanese finance minister assured that the yen’s excessive gains will be discussed and the nation cannot accept further currency gains and high volatility that is affecting the economy.
Also the FOMC from the U.S. and the infamous October jobs report will have the main focus this week as investors need to see more positive signs to ensure sustained growth, especially as the GDP from the states last week helped as well in easing recessionary fears and the worries over the outlook.
Major highlights for this week that will affect the USD/JPY pair’s trading:
Monday October 31:
On Monday at 05:00 GMT, Japan will release the Construction Orders for September where the previous reading was 9.3%.
The annual Housing Starts for September will be also released at 05:00 GMT, which is expected to drop to 0.906 million from the prior reading of 0.934 million.
At 13:45 GMT, the U.S. economy will release the Chicago Purchasing Manager for October which is expected to ease to 59.0 from 60.4.
Tuesday November 01:
The U.S. economy will issue the Construction Spending for September at 14:00 GMT, where it’s expected to come at 0.3% from the prior reading of 1.4%.
The ISM Manufacturing for October will be released at the same time, and expected at 52.3 from the previous reading of 51.6.
Wednesday November 02:
The U.S. economy will release the ADP employment change for August at 12:15 GMT, where it’s expected at 101 thousands from the previous reading of 91 thousands.
At 16:30 GMT, the Federal Open Market Committee will announce its Rate Decision, which is expected to be steady between 0.0% and 0.25%; and at 18:15 GMT Fed’s Governor Bernanke will speak at the Fed Press Conference.
Thursday November 03:
On Thursday at 12:30 GMT, the U.S. economy will release the Non-Farm Productivity for the third quarter, where the preliminary reading is expected to come at 2.5% from the prior reading of -0.7%.
The Unit Labor Costs for the third quarter is expected to come at -0.4% from the previous reading of 3.3%.
At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 402 thousand last week.
The U.S. ISM Non-Manufacturing Composite for September will be released at 14:00 GMT, where it’s expected to come at 54.0 from the prior reading of 53.0.
Friday November 04:
The United States of America will release the non-farm payrolls at 12:30 GMT, which is expected to show that the U.S. economy added 100 thousand jobs during the month of October compared with the previous reading of 103 thousand jobs.
Unemployment rate during the month of October is expected to be steady at 9.1%, while the yearly average hourly earnings index had a previous reading of 1.9%.
Read more Forex Market Analysis here!
