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Forex - USD/JPY weekly outlook: November 17 - 21

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Investing.com -

Investing.com - The U.S. dollar hit fresh seven-year highs against the yen on Friday after upbeat data on U.S. retail sales boosted the outlook for the economic recovery.

USD/JPY rose to 116.82, the most since October 2007, before pulling back to 116.28 in late trade, up 0.44% for the day. For the week, the pair advanced 1.53%.

The dollar was boosted after the Commerce Department reported that U.S. retail sales rose 0.3% in October, ahead of forecasts for a 0.2% increase.

The greenback trimmed gains after separate data showed that U.S. inflation expectations fell in an otherwise upbeat report on consumer confidence for this month.

The preliminary reading of the University of Michigan's consumer sentiment index rose to a seven year high of 89.4, better than forecasts of 87.5 and up from October's reading of 86.9.

However, the report also showed that consumers expected annual inflation of 2.6% this year, down from expectations for inflation of 2.9% in October.

The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.25% to 87.61 in late trade, not far from the more than four-year highs of 88.36 hit earlier in the session.

The yen came under renewed selling pressure earlier week amid speculation that Japanese Prime Minister Shinzo Abe could call a snap election in December. A win for Abe would indicate continued support for his for his economic and fiscal policies, which call for a weaker yen.

Speculation that the prime minister could postpone a proposed sales tax increase, scheduled for October 2015 also curbed investor demand for the currency.

Last month, the BoJ boosted its quantitative easing program in a bid to combat slowing growth and inflation, weakening the yen across the board.

In the week ahead, investors will be focusing on Wednesday's minutes of the Federal Reserve's October meeting and Thursday's report on the U.S. consumer price index. Monday's data on third quarter growth from Japan and Wednesday's policy announcement by the BoJ will also be closely watched.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.

Monday, November 17

Japan is to publish preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health.

The U.S. is to release a report on manufacturing activity in the New York region, as well as data on industrial production.

Tuesday, November 18

The U.S. is to release data on producer price inflation.

Wednesday, November 19

The BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.

The U.S. is to release data on building permits and housing starts.

Later Wednesday, the Federal Reserve is to publish the minutes of its October meeting.

Thursday, November 20

Japan is to publish data on the trade balance, the difference in value between imports and exports.

The U.S. is to round up the week with data on initial jobless claims, consumer prices, existing homes sales and manufacturing activity in the Philadelphia region.

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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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