By FX Empire.com
The USD/JPY pair traded in a narrow range with the beginning of last week before it dropped from its highest level in three months, as the dollar was unstable during last week
The latest intervention from the Bank of Japan has weakened the yen by 4.7% against the dollar, but the USD/JPY pair did not return to the upside since then, which means that the risk aversion still finds its way between traders.
The Japanese yen has the lowest interest rate among all development countries, and Japan is still able to record a surplus which qualifies the yen to be the first save haven currency.
Over the short term, the yen still has the upper hand again against the dollar since the EU crisis and the U.S. economy slowdown dominate the market, which will drive investors to shift to the lower-yielding currencies such as the yen as a safe haven.
The greenback soared against the European currencies after Italian yields increased by 7.0%, which fueled fears that Italy may follow Greece and Portugal steps and ask for help.
The confidence evaporated from markets and risk aversion returned to drag higher-yielding currencies down, where investors shifted to safe haven currencies such as the dollar and the yen.
Major highlights for this week that will affect the USD/JPY pair’s trading:
Monday November 14:
On Monday at 23:50 GMT (Sunday), Japan will release the Gross Domestic Product for the third quarter, where the preliminary reading is expected to show a growth of 1.5% from the previous contraction of 0.5%.
The Annualized Gross Domestic Product for the third quarter is expected to show growth of 6.0% compare to the previous contraction of 2.1%.
At 04:30 GMT, the Japanese economy will release the Industrial Production for September, where the previous reading was down by 4.0, while the annual reading was down by 4.0% also. The Capacity Utilization for September had a previous reading of 2.4%.
Tuesday November 15:
On Tuesday, the U.S. economy will release the Producer Price Index for October at 13:30 GMT, where the previous reading was up by 0.8% and it’s expected to drop by 0.2%, while the annual Producer Price Index for October is expected to come at 6.3% from the previous 6.9%.
The Advance Retail Sales for October will be released at 13:30 GMT with a previous reading of 1.1% and it’s expected to retreat to 0.2%.
At 13:30 GMT, the Empire Manufacturing for November will be released, where it’s expected to come at -4 from -8.48. The Business Inventories for September will be released at 15:00 GMT, and it’s expected to come at 0.5% in line with the previous reading.
Wednesday November 16:
On Wednesday at 04:00 GMT, the Bank of Japan will release its interest rate decision, where it’s expected to maintain the rate at its lowest level between 0.0% and 0.10%.
The U.S. economy will release the Consumer Price Index for October at 13:30 GMT, where the prior reading was 0.3% and expectations refer to 0.0%, while the annual CPI is expected to come at 3.6% from the previous 3.9%.
At 14:00 GMT the Net Long-term TIC Flows for September will be released, where it had a previous reading of $57.9 billion, as for the Total Net TIC Flows it had a previous reading of $89.6 billion.
The Industrial Production for October is due at 14:15 GMT and expected to come at 0.4% from the previous 0.2%, while the Capacity Utilization is expected to come at 77.7% from 77.4%.
Thursday November 17:
The U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand.
At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand.
The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.
Friday November 18:
The United States will end the week at 15:00 GMT with the Leading Indicators for October which are expected to improve to 0.5% from 0.2%.
Originally posted here
