Yahoo Finance USD/JPY Fundamental Daily Forecast – US Durable Goods on Tap; Fed Begins Two-Day Meeting
The Dollar/Yen is trading nearly flat on Tuesday as investors react to a mixed performance in the global equity markets. Helping to put a lid on the Forex pair is the plunge in Asia Pacific shares. Underpinning the Forex pair are the steady stock market performance in Europe and calls for a higher opening in the United States.
At 10:51 GMT, the USD/JPY is trading 108.875, down 0.023 or -0.03%.
The catalyst behind the price action remains fear over the spread of the deadly coronavirus, its impact on China, and its potential impact on the global economy.
Throughout Tuesday’s session, USD/JPY traders will be influenced by demand for risky assets and the direction of U.S. Treasury yields. Lower demand for risky assets and lower yields will keep the downside pressure on the Dollar/Yen. An easing of pressure on stocks and firmer yields will encourage investors to trim positions in the safe-haven Japanese Yen.
Japan Economic News
The Bank of Japan (BoJ) reported that the Services Producer Price Index rose by 2.1% in December from a year ago, the same as in the previous three months and in line with expectations. Month-on-month, the index was unchanged, slowing from the November increase of 0.2%.
The BoJ also reported that the core Consumer Price Index (CPI) rose by 0.3% in December, year-on-year, whereas experts were expecting the same 0.2% rate of growth as in the preceding month.
US Economic News
At 13:30 GMT, traders will get the opportunity to react to the latest reports on U.S. Core Durable Goods Orders and Durable Goods Orders. Traders are looking for readings of 0.4% and 1.2% respectively.
At 14:00 GMT, the S&P/CS Composite-20 HPI is expected to come in at 2.5%, up from 2.2%.
At 15:00 GMT, Conference Board Consumer Confidence is expected to come in at 128.2, up from 126.5 and the Richmond Manufacturing Index is expected to come in at minus 3 versus the previously reported minus 5.
FOMC member John Williams is also scheduled to speak at 14:30 GMT.
On Monday, New Home Sales came in lower than expected at 694K. Traders were looking for a reading of 730K. The previous month was also revised lower to 697K.
Treasury News
Investors are likely to closely monitor the Federal Reserve’s first meeting of the year on Tuesday, with the U.S. central bank’s two-day meeting widely expected to keep interest rates unchanged.
The Federal Open Market Committee (FOMC) held the target range for the federal funds rate at 1.5-1.75% in December, following three consecutive rate cuts.
The U.S. Treasury is set to auction $26 billion in 52-week bills, $32 billion in seven-year notes and $20 billion in two-year floating-rate notes (FRNs).
This article was originally posted on FX Empire
