Trading recommendations and Technical Analysis – HERE!
Corrective weakness last week after a sharp rise of USD / JPY at the beginning of the month seems to have stopped. Opening day gap down on the background of gunfire and explosions thundered in Paris at the end of last week, USD / JPY pair to the opening of the European session, rose by more than 45 points for the opening day. The US dollar is leading in the preferences of investors from the risks of leaving in safe-haven assets. On the eve of the closure of the US trading session on Friday, the US major stock indexes were down, and blocked the decrease in growth of the past two weeks.
So, Dow Jones Industrial Average fell 1.2%, and this week - on 3,7%, S & P500 fell by 1.1% and 3.6% for the week. It seems that investors are prepared to raise interest rates in the United States in December, the first such increase since 2006. Futures on interest rates are 72% chance of a rate hike in December, and, according to a poll WSJ, about 92% of economists believe that. Prior to that, since 2006, a soft monetary policy stimulated the growth of the stock markets and helped to reduce the US dollar against other major currencies. The turning point came about in the middle of July 2014. And, although the pair USD / JPY is in a global growing trend in 2012, in July 2014 the pair received additional impetus, and then the Bank of Japan eased monetary policy in the country.
At the end of October 2015 the Bank of Japan at its next meeting left asset purchase program unchanged at 80 trillion yen, but the comments of representatives of the bank pointed to the commitment of the Bank of Japan's loose monetary policy. USD / JPY pair maintains positive momentum, resulting in early November by the strong labor market data in the US (NFP) in October.
Released this morning data showed a decline in Japan's GDP growth in Q3 (0.2% vs. 0% forecast and -0.2% in the previous period). In annual terms, GDP decline of 0.8% vs. 0.2% and 0.7% against a decline in the previous quarter 2.
The Japanese stock index Nikkei Stock Average at the end of the Asian session, fell by 1%.
Released last Thursday, the price index for corporate goods (DCGPI) declined in October (-0.6% vs. -0.4% forecast in a monthly basis and -3.8% vs. -3.5% forecast in annual terms) . This indicator measures the change in the level of prices for corporate goods and allows you to monitor production costs and production cost, as well as inflation in the manufacturing sector. Declining DCGPI, coupled with a decrease in GDP in the 3rd quarter point to a slowing economy and rising inflation.
In 2017 the Bank of Japan lowered its growth forecast of inflation (to 1.4% from the previous value of 1.9%) and GDP growth (to 1.4% instead of 1.5%).
It seems that the Bank of Japan once again faced the need to stimulate the economy. His head Kuroda has said earlier that the central bank "will not hesitate to further easing, if needed", and the "constraints of available monetary instruments" the bank does not.
On November 19 (Thursday) at 04:00 (GMT) scheduled regular meeting of the Bank of Japan's monetary policy in the country and will take a decision on the interest rate. It is possible that it has already held her down with the current minimum level of 0.1%, and will extend the current asset purchase program. Then the pair USD / JPY will rise sharply.
See also review and trading recommendations for the pair EUR/USD!
