By FXEmpire.com

Analysis and Recommendation:

The USD/JPY continues to strengthen as Japans political scene reaches turmoil. Prime Minister Noda’s government may face a No Confidence vote. The opposition party, the LDP (Liberal Democratic Party), may submit a no-confidence motion and a censure motion soon, if the ruling party, the DPJ (Democratic Party of Japan), does not promise to hold an early general election.

The LDP, which advocates a higher inflation target of 2.0 per cent, is likely to be the first party, increasing expectations of a more aggressive Bank of Japan easing. The Bank of Japan is currently holding its policy meetings.

Prime Minister Noda barely survived the passing of new sales tax legislation last month, as his government passed the bill, but lost significant support.

The USD/JPY is trading at 78.51 in Asian trading this morning

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 August 8, 2012 actual v. forecast

Date

Currency

Event

Actual

Forecast

Previous

Aug. 08

JPY

Adjusted Current Account

0.77T

0.75T

0.28T

JPY

Bank Lending (YoY)

0.7%

0.6%

PHP

Philippines CPI (MoM)

0.30%

0.30%

0.50%

AUD

Home Loans (MoM)

1.3%

2.0%

-0.9%

KRW

South Korean M2 Money supply

9.60%

9.20%

MYR

Malaysian Trade Balance

9.20B

5.20B

4.60B

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

Date

Time

Currency

Event

Previous

Aug 9

1:30

AUD

Employment Change

-27.0K

1:30

AUD

Unemployment Rate

5.2%

12:30

USD

Trade Balance

-48.7B

12:30

USD

Unemployment Claims

Aug 10

1:30

AUD

RBA Monetary Policy Statement

12:30

USD

Import Prices m/m

-2.7%

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date Time Country

Aug 09 15:30 Italy

Aug 09 17:00 US

Aug 10 10:00 Belgium

Aug 13 09:10 Italy

Aug 13 09:10 Norway

Aug 13 09:30 Germany

Aug 14 09:10 Greece

Aug 14 09:10 Italy

Aug 14 09:30 Belgium

Aug 14 14:30 UK

Aug 15 09:10 Sweden

Aug 16 09:30 UK

Aug 16 15:00 US

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Originally posted here