USD/JPY Fundamental Weekly Forecast – Yellen, Draghi Speeches on Friday Important to U.S. Dollar
The Dollar/Yen finished higher for the week, but the price action was tumultuous. The price action was mostly dictated by the direction of U.S. Treasury yields which were all over the map last week due to the news events and the economic data.
The USD/JPY settled at 109.192, up 0.039 or +0.04%.
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Risk-on and Risk-off sentiment basically dictated the price action as well as the U.S. Government Bond and Japanese Government Bond interest rate differential.
Forecast
There are no major economic reports out of Japan this week. Most investors will be focused on the Jackson Hole Symposium.
Minor reports from Japan include the All Industries Activity report, Flash Manufacturing PMI, National Core CPI, Tokyo Core CPI and SPPI.
The U.S. will report Durable Goods due on Friday. Core Durable Goods Orders are expected to come in at 0.4%. Durable Goods Orders are expected to come in at -5.7%.
Several Fed members are also scheduled to speak including FOMC Member Robert Kaplan on Wednesday and Fed Chair Janet Yellen on Friday.
The big event is going to be the central bankers’ Jackson Hole Symposium. It takes place on Thursday, Friday and Saturday.
The price action this week could be dictated by what the central bankers’ say at Jackson Hole especially European Central Bank President Mario Draghi and the Fed’s Janet Yellen. Yellen speaks at 1600 GMT on Friday and Draghi speaks at 1900 GMT on Friday.
The wildcards this week are President Trump and North Korea.
At the start of the week, the Fed is mixed so the chances of the next Fed rate hike is about 50/50. The news events are unpredictable. However, if Trump says anything negative or the North Korean situation escalates then look for money to flow into the safe haven Japanese Yen. Draghi and Yellen could move the U.S. Dollar if they talk about monetary policy.