Latest in Forex News shows that the US Dollar started to fall below expectations as the top market movers aided the slow descent of the currency.
The US Dollar has been on a somewhat shaky trajectory for the past months and the Japanese economy has been slowly recovering since last year’s Earthquake. For one thing, the capital spending on the country has increased to 3.3 percent and expectations of an 8.7% increase in the future. Corporate spending has been pulled up, as domestic demands are relatively unchanged in the international market.
Japan’ domestic market has also been incredibly active, the numbers reaching an impressive 55.8% percent annual surge just last month. The banknotes and coins in circulation are up 2.3 percent and 0.2 percent respectively.
As for consumer spending, the numbers have experienced a positive shift. Although the unemployment rate has remained unchanged, the inflation rate has dropped 0.5 percent in August. This is still lower than the predicted 0.6 percent but is definitely an improvement for the Japan economy. Consumer spending has risen by 1.6 percent in June followed by another 1.7 percent increase.
USD/JPY Market Movers – Declines
Despite the upward trends of some economic stats, the average cash earnings of Japanese labor have gone down despite an expected 0.1 percent gain. The cash earnings actually dropped by 0.6 percent and another drop of 0.3 percent have been predicted for the following months. Leading indicator index have also shown a 2 point dip in June from May’s 95.2. This is actually the third time this happened and future declines have been forecasted at 91.7.
BOJ Governor Shirakawa Speech in Tokyo
On Thursday, the BOJ Governor Masaaki Shirakawa is expected to give a speech on Tokyo. The talk is expected to provide further hints on the economic situation of the country and the future policies of the BOJ affecting the volatility of the market. From the BOJ Governor’s speech, traders are hoping to get ideas on how to place their investments in the market and hopefully obtain a profit from the United States Dollar and Japanese Yen pairing.
Despite last year’s Earthquake, Japan’s economy managed to bounce back, allowing it to somewhat retain its position in the worldwide market. An understandable dip in the Yen happened right after the quake but as reports show, the problem is no longer that prevalent after more than a year. The US Dollar is not of the same position though. Aside from various economic and political factors affecting the United States, natural calamities are also hitting the country left and right. Specifically, Hurricane Isaac managed to shut down several oil rigs while the series of earthquakes in California have put locals on edge.
As early as June, analysts have already predicted that the USD/JPY will finish the year 2012 lower as reported by those from HSBC. Although charts have shown that the currency pair managed to ride an upward trend for the past months, the current trajectory in charts seems to be going downward. Despite that, some analysts are predicting bullish in Yen for the following months.