This week investors will focus on the US economic reports and Fed speakers. Traders will be looking for hints as to when the central bank will begin tapering.
The major events out of the US are Tuesday’s retail sales report and Federal Reserve Chairman Jerome Powell’s speech. On Wednesday, the Fed will release the minutes from its July monetary policy meeting.
Minor reports include the Empire State Manufacturing Index, Industrial Production, Capacity Utilization, Building Permits, Housing Starts, the Philly Fed Manufacturing Index and weekly unemployment claims.
In Japan, we could see a small reaction to reports on GDP, Industrial Production, Tertiary Industry Activity, Core Machinery Orders, Trade Balance and National Core CPI.
The most import influence on the direction of the USDJPY will be the direction of the 10-year U.S. Treasury yield. On Friday, the yield dropped below 1.3%. Continued weakness this week will drag the USDJPY lower.
We expect this week that the USDJPY will continue its bearish trend.
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