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Forex - USD/JPY weekly outlook: August 29 - September 2

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Forexpros - The U.S. dollar fell sharply against the yen on Friday, erasing the week's gains to trade close to the pair's all-time low as fresh concerns over the U.S. economic recovery dampened demand for the greenback.

USD/JPY hit 77.69 on Thursday, the pair's highest since August 9; the pair subsequently consolidated at 76.65 by close of trade on Friday, slipping 0.11% over the week.

The pair is likely to find support at 75.94, the low of August 19 and the pair's all-time low and resistance at 77.69, Thursday's high and a two-week high.

Speaking Friday, at the Federal Reserve's annual retreat in Jackson Hole, Wyoming, bank Chairman Ben Bernanke said the Fed was prepared to implement fresh measures to bolster U.S. growth, but stopped short of outlining when and if this may happen.

Bernanke said that the bank's September policy-setting meeting would run for two days instead of one, in order to "allow a fuller discussion" of the economic outlook.

Also Friday, the Commerce Department said the U.S. economy expanded more slowly than expected in the second quarter, as higher fuel prices, poor weather conditions and disruptions to manufacturing activity from the March earthquake in Japan weighed.

Gross domestic product rose by 1%, disappointing expectations for an expansion of 1.1%. The Commerce Department had originally estimated GDP growth of 1.3% in the second quarter.

The lackluster data added to concerns that the U.S. economic recovery is losing momentum and saw the greenback fall back towards a record low against the yen.

Earlier in the week, Japan's Finance Minister Yoshihito Noda unveiled a two-pronged approach aimed at curbing the appreciation of the yen, including a credit line to promote foreign investment by companies with extensive yen holdings.

Japan's Economy Minister Kaoru Yosano said Friday that the government will release a list of measures on Monday for how the next administration, which is expected to be formed next week, could respond to the appreciation of the yen.

The statement underlined the view that officials are leaning towards measures to cope with yen strength, rather than measures to counteract it through aggressive yen selling.

In the coming week, investors will be looking towards Friday's release of U.S. data on non-farm payrolls in order to gauge the strength of the U.S. recovery.

Also next week, the U.S. Institute of Supply Management is to publish its index of manufacturing activity for August, while Japan is to publish preliminary data on industrial production.

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

Monday, August 29

The U.S. is to produce industry data on pending home sales, a leading indicator of health in the housing market. The nation is also to release official data on personal income and expenditure and consumer prices.

Tuesday, August 30

Japan is to produce official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity, as well as data on household spending and the unemployment rate.

The U.S. is to release data on consumer confidence, a leading indicator of consumer spending, as well as an industry report on house price inflation. In addition, the Federal Reserve's Open Market Committee is to publish the minutes of its most recent policy setting meeting.

Wednesday, August 31

In the U.S., payroll processing firm ADP is to release a report on non-farm payrolls, which leads government data by two days. The U.S. is also to publish data on manufacturing activity in the Chicago area, factory orders and crude oil stockpiles.

Thursday, September 1

The U.S. is to publish its closely watched weekly report on initial jobless claims, while the ISM is to produce data on manufacturing sector growth.

Friday, September 2

Japan is to publish government data on capital spending, a leading indicator of economic wellbeing.

The U.S. is to round up the week with a government report on private sector job creation, a key indicator of overall economic health. The country is also to publish official data on the unemployment rate and average hourly earnings, an important inflationary indicator.

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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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