The USD/JPY moved south again and the Japanese yen extended early gains versus U.S. dollar on Wednesday as losses in Asian stocks and commodities damped demand for higher-yielding currencies.On the other hand, the new 5.8 quake that hit the north of Japanhas increased demand for the Japanese yen, as concerns are back dominating investors’ decisions.
Feds Chairman Ben S. Bernanke said last week that accelerating inflation will be temporary, as the increase in commodity prices is expected to slow.
Some Fed policy makers indicated that rising inflation rate is transitory, which could prevent them from hiking interest rates following ECB. This fact could give the Japanese currency more momentum against the greenback.
Moreover, the International Monetary Fund cut its economic growth forecasts for the U.S. and Japan, where the Japanese government said problems remains at the nuclear plant after this week quake.
The last day of the week will witness the release of Japanese industrial production index for February at 04:30 GMT; in January the rose 0.4%, and 2.8% on the year.
The U.S. economy will end the week with more inflation data, as the consumer price index for March will be released at 12:30 GMT; inflation is expected with 0.4% rise compare with 0.5%, on the year inflation is expected to rise to 2.6% from 2.1% previous.
Furthermore, U.S. will release the total net TIC flows for February at 13:00 GMT, rise in inflows will be positive for the dollar, where they cover the trade deficit and show remaining faith in US assets, especially treasuries amid the high uncertainty.
Industrial production for March will be released at 13:15 GMT; and expected to show a rise of 0.5% compare with the last drop of 0.1%, the capacity utilization index for March could show a rise of 77.3% from the previous of 76.3%.
Finally, U.S. will release April’s University of Michigan survey of consumer confidence at 13:55 GMT, the preliminary reading is expected to come at 69.0 compare with the previous reading of 67.5.
Originally posted here
Read more about forex technical analysis, forex fundamental analysis and forex news on ForexMansion.com
About ForexMansion.com:
www.ForexMansion.com is a part of the Finance Mansion Network which operates global financial websites. Our goal is to provide our readers with the most accurate, quality and up-to-date technical analysis, fundamental analysis and news in order to assist them in making the right financial decisions.
The Finance Mansion Network includes www.FinanceMansion.com,www.ForexMansion.com, www.StocksMansion.com, www.CommoditiesMansion and many more.
