By FXEmpire.com
Analysis and Recommendation:
The USD/JPY is trading at 78.81 The yen’s strength and falling stock prices pose a risk to the Japanese economy, Finance Minister Jun Azumi told his G7 partners on Tuesday, signaling that Tokyo was prepared to intervene to curb its currency with or without the group’s approval.
Azumi spoke to reporters after an emergency conference call of Group of Seven finance chiefs devoted to the euro zone debt crisis as alarm grows over the threat to the global economy posed by strains inside the 17-nation monetary union.
“I said we have a sense of crisis because the rapid yen’s rise since last week has led to the stock market … hitting a fresh low since … just as Japan’s situation was looking up,” he said.
The yen rose last week to 78.05 per dollar from 79.66 a week earlier. The currency has acted as a safe haven for investors during the euro area debt crisis although it remains below a record high of 75.31 hit last October.
Contagion from the European debt crisis continues to worry investors and economists around the globe. Yesterday, the G7 had an emergency teleconference.
In a statement, Treasury said that the G7 finance officials agreed to keep monitoring developments closely in the run-up to a leaders’ summit of the Group of 20 major economies on June 18-19 in Los Cabos, Mexico. The European debt crisis is expected to be the major agenda item at that meeting. The G7 countries are the United States, Japan, Germany, France, Britain, Canada and Italy. The G20 includes the G7 nations plus emerging economic powers such as China, India and Brazil.
The Japanese authorities alarmed that the yen’s recent rally after a period of relative calm could derail economic recovery have stepped up verbal warnings in the past week or so.
But sources familiar with currency and monetary affairs said before the G7 call that Japan was unlikely to get the blessing of its peers for a solo intervention.
They also said the authorities would be in no rush to step into the market aware that the yen was now being driven by factors beyond Tokyo’s control, such as Europe’s debt crisis and expectations of further U.S. monetary easing.
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 June 5 – 6, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
EUR |
Final Services PMI |
46.7 |
46.5 |
46.5 |
|
|
EUR |
Retail Sales m/m |
-1.0% |
-0.1% |
0.3% |
|
|
EUR |
German Factory Orders m/m |
-1.9% |
-1.0% |
3.2% |
|
|
Building Permits m/m |
-5.2% |
-0.3% |
4.9% |
||
|
CAD |
Overnight Rate |
1.00% |
1.00% |
1.00% |
|
|
USD |
ISM Non-Manufacturing PMI |
53.7 |
53.6 |
53.5 |
|
|
Jun 6 |
AUD |
GDP q/q |
1.3% |
0.5% |
0.6% |
Upcoming Economic Events that affect the AUD, NZD, JPY and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jun 7 |
1:30 |
AUD |
4.9% |
|
|
1:30 |
AUD |
15.5K |
||
|
12:30 |
USD |
383K |
||
|
14:00 |
USD |
|||
|
23:50 |
JPY |
0.79T |
||
|
23:50 |
JPY |
1.0% |
||
|
Jun 8 |
1:30 |
AUD |
-1.59B |
|
|
1:30 |
AUD |
0.3% |
||
|
12:30 |
USD |
-51.8B |
||
|
14:00 |
USD |
Government Bond Auctions
Date Time Country
Jun 07 00:30 Japan
Jun 07 08:30 Spain
Jun 07 08:50 France
Jun 07 09:10 Sweden
Jun 07 15:00 US
Jun 08 10:00 Belgium
Jun 08 15:30 Italy
Click here a current USD/JPY Chart.
Originally posted here
