By FX Empire.com
The USD/JPY pair dropped sharply early Wednesday to trade near its post-war level, where the Japanese yen used the dollar weakness to record more gains, while it couldn’t rise against other major due to the risk appetite.
Market participants are still nervous about the possibility of further intervention from the BOJ in FX market to sell the yen, since the Japanese currency soared to its highest level against the dollar.
Talks about the third round of quantitative easing drove the dollar to the downside against other majors, at the same time yen traders are waiting for the BOJ’s meeting this week which provides more uncertainty in the FX market and increased demand for the yen before any intervention from the BOJ.
On Thursday the market will react to the final announcement from the EU leaders and what the euro area will do to contain the crisis. This will be the main impact and focus for trading and actually for the coming period, to assess if the measures are strong enough or not.
At 23:50 GMT (Wednesday), Japan will release the annual Retail Trade for September, which had a previous reading of -2.6% and expected to rise to 0.1%.
The seasonally adjusted Retail Trade for September is expected to drop to 0.3% from the previous -1.7%.
At 04:00 GMT the Bank of Japan will announce its rate decision for October, where it’s expected to keep the rate steady at 0.10%, while market participants will focus on the bank’s statement.
Also at 12:30 GMT the U.S. economy will release the annualized Gross Domestic Product for the third quarter, where the advanced reading is expected to show a growth of 2.3% from the previous 1.3%.
U.S. Personal Consumption is expected to show a rise of 1.9% from the prior 0.7%, while Core PCE is expected to come at 2.3% in line with the previous quarter.
On Thursday at 12:30 GMT, the U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for state unemployment insurance increased 403 thousand last week.
The U.S. Pending Home Sales for September is expected to come at 0.1% from -1.2%, while the annual reading had a prior reading of 13.1%.
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