USD/JPY Forecast – What You Need to Know About the USD/JPY Currency Pair
If you are thinking about buying or selling the USD/JPY currency pair, then there are a few things you need to know about this pair before you go out and make a purchase. In this article, I will take you through the basics of the pair, explain the history behind it, and share with you my forecast for the future of the pair.
US NAHB Housing Market Index for November is predicted at 36
The National Association of Home Builders (NAHB) released its US NAHB Housing Market Index for November. The report, which is released each month, gauges the single-family housing market in the United States.
The report measures current sales of single-family homes, the level of buyer traffic, and sales expectations for the next six months. The report is based on a survey of members of the NAHB. The NAHB index was down five points to 33 in November, from 38 in October. The index has dropped each month this year. The three components of the index were also lower than the month before, including the traffic of prospective buyers. The number of prospective buyers decreased by five points to 20. The metric is considered a positive sign because it is higher than the average reading.
Homebuilder confidence, on the other hand, fell four points to 31. The metric has been on the decline since the start of the year, although it still remains well above the long-term average. Overall, the report shows that builders continue to face a variety of challenges. The high costs of building materials and construction financing continue to stymie affordability, and the number of foreclosures continues to climb. In addition, a shortage of available homes and a restrictive lending environment discourage buyers from entering the market.
The report also notes that the number of new single-family homes built in the US rose in November. However, it isn’t enough to keep the underlying growth rate stable. The National Association of Home Builders report also highlighted the slowness of the housing market’s recovery, with builder confidence falling to the lowest level in years. The report noted that building permits have declined by more than 2 percent to an annual rate of 1.512 million, and construction activity has slowed.
US Crude Oil Inventories for the week ending November 11th are predicted at -0.440M
When the United States entered World War I, oil supplies in Britain and France were in short supply. As a result of the conflict, the country became an economic superpower. As the United States began to develop its auto industry, the demand for fuel rose. The number of cars in the nation grew from 26 million to 40 million in five years. However, the nation is still reliant on foreign sources for most of its oil.
The United States Strategic Petroleum Reserve is at its lowest level since 1984. It is estimated that the reserve will be depleted to about 1.5 million barrels by December 2022. The administration intends to replenish the SPR at about $70 per barrel. In addition, the United States imports less than 260,000 barrels of crude oil a day. This means that domestic production cannot meet the demands of the country. As a result, the country is shifting toward cheaper foreign exploration.
In the next few weeks, the Obama administration will release thirty million barrels of oil from the Strategic Petroleum Reserve to increase supplies. This will be the fourth major drawdown since 1977. The government’s release coincides with a similar release by OPEC members. The oil producers’ cartel agreed to limit production by two million barrels a day starting in November. But the fall in price caused a rift among OPEC ministers.
Last week, crude inventories in the United States increased by 3.9 million barrels. Gasoline stockpiles rose by 2.6 million barrels. Both of these stocks are significantly lower than they were a year ago. The United States exports oil to European nations, but the European Union is tightening its import restrictions due to the Russian invasion of Ukraine. The EU will ban Russia’s oil products by February.
ING predicts the Japanese yen will weaken against the US dollar in the short term
The Japanese yen has fallen in value by a significant amount and has taken a beating on the global stage, in particular as the euro, British pound and Australian dollar have all weakened. However, a recent report by ING Bank, the largest retail bank in the UK, claims the yen will make a comeback in the near future.
The bank’s chief economist, Peter Welch, predicts that the Japanese yen will make a comeback within a few years. This is largely attributed to a new wave of monetary stimulus, including a stimulus plan that was backed by China and the European Union. The Japanese yen has a long history of being used as a safe haven, particularly after the Covid pandemic. Moreover, the yen is the world’s largest indebted nation.
The Japanese yen hasn’t been this low against the US dollar since 1990. The yen also boasts a strong economy, but its growth has been meager in the past three decades. As a result, a more hawkish Bank of Japan would be a boon to the yen. The Bank of Japan is due for its first hike in interest rates in about a year. If it’s not there, investors will need to find other ways to stow their dollars. The yen’s relative strength is a boon to the Chinese. This is not to mention the Chinese’s trade deficit with the United States, which may dwindle in the coming years.
ING’s chief economist, Welch, also cites a few other reasons for the yen’s recent surge. The Japanese government has been spending a record 2.8 trillion yen on a stimulus plan, which is more than any other country. Despite this, the yen’s recent gains haven’t offset the country’s large fiscal deficit and rising unemployment.
USD/JPY price forecast based on historical trend dynamics and the asset price seasonality
One of the most important financial markets is the exchange rate between the US dollar and Japanese yen. The pair is closely tied to bond prices in the two countries. If the interest rates rise in the U.S., the Yen is likely to depreciate. However, if the price of Treasury bonds falls, the dollar is likely to strengthen against the Yen. In the United States, the Fed has been preparing for its December policy meeting. The US consumer inflation figures will affect the Fed’s outlook. The upcoming data will likely put pressure on the dollar. This may cause a flutter in the USD/JPY pair. The USD/JPY pair is currently range-bound. While the economic situation in the US may determine the direction of the directional move, traders will take cues from the usual Weekly Initial Jobless Claims from the US. The FOMC’s next policy meeting will be scheduled for December 13-14.
The currency pair is a complex proposition. It is influenced by a wide variety of factors, including interest rates, commodity prices, and the stock market. Historically, the dollar has been correlated to the yen, but there are also significant differences. Those differences could be rooted in perceptions about currencies as financial assets.
The global economy is under severe pressure. The stock market has experienced some of the worst drops since the “Black Monday” crash in 1987. The Dow Jones Industrial Average has dropped by 12.9%. Several countries have imposed travel restrictions, which have affected international trade. These factors have caused massive disruptions in the financial markets.
The USD/JPY pair reacts to important events in the United States, Japan, and East Asia. Several countries have imposed travel restrictions and lockdowns, which have impacted their economies.