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Forex - USD/JPY weekly outlook: August 22 - 26

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Forexpros - Last week saw the yen strengthen to a new record high against the U.S. dollar on Friday, as growing concerns over the global economic outlook and lingering fears over sovereign debt issues bolstered safe haven demand.

USD/JPY hit 75.94 on Friday, the pair's all-time low; the pair subsequently consolidated at 76.53 by close of trade, easing down 0.37% over the week.

The pair is likely to find support at 75.94, Friday's low and the pair's record low and resistance at 77.30, the high of August 10.

Japan's Vice Finance minister for International Affairs, Takehiko Nakao said Friday the yen's gains did not reflect economic fundamentals, adding that there was an "element of speculation" behind it.

Japanese authorities intervened to weaken the yen on August 4 amid concerns that the yen's appreciation would hinder the largely export-based economy's recovery from a downturn sparked by the March 11 earthquake and tsunami.

Since then officials have continued to warn markets against pushing up the yen, with Finance Minister Yoshihiko Noda saying Friday that he would "keep monitoring markets carefully."

Meanwhile, the euro edged higher against the yen as the European Central Bank continued buying government bonds to keep the region's sovereign debt crisis from spreading, while European Union officials stepped up efforts to deal with the debt crisis.

On Tuesday, German Chancellor Angela Merkel and French President Nicolas Sarkozy proposed tighter policy coordination between euro zone member states, in an attempt to reassure markets about the cohesion and survival of the single currency bloc.

Looking ahead, speculation that Federal Reserve Chairman Ben Bernanke may use the Jackson Hole symposium to announce additional measures to support the U.S. economy seem likely to continue to weigh on market sentiment.

Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.

Monday, August 22

The U.S. is to publish data on mortgage delinquencies, a sign of health in the housing market.

Tuesday, August 23

The U.S. is to release official data on new home sales, a leading indicator of economic health.

Wednesday, August 24

The U.S. is to publish government data on durable goods orders, a leading indicator of production. The country is also to publish data on crude oil inventories.

Thursday, August 25

The U.S. is to publish government data on initial jobless claims, a leading indicator of economic health. Meanwhile, the annual economic symposium in Jackson Hole, Wyoming is to begin.

Friday, August 26

Japan is to produce official data on consumer price inflation, which accounts for a majority of overall inflation.

The U.S. is to publish preliminary data on gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.

Also Friday, Fed Chair Ben Bernanke is to speak at the second day of the economic symposium in Jackson Hole.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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