Japan’s Former Economic Minister Ota Comments

Japan’s former Econ Min Ota: Japan will have a W-shaped recovery; Economy to grow this year but then decline, remaining “very weak” next year

Economic Calendar (6/8/2009)

Monday, June 8, 2009

USD/JPY A Couple of Perspectives

Looking at a longer-term USD/JPY chart from the August ’08 highs to the January ’09 lows we see the trendline resistance and 50% retracement level collaborate to act as resistance on the pairs appreciation during the NY Friday on a better than expected Non-Farm Payroll report although the unemployment rate was worse than expected.

On the shorter term USD/JPY retracement analysis from the January lows to the recent early April highs, we see the double top and bottom we have been watching and perhaps a new support level at the 200 day moving average broken on the Friday payroll report. A pull back toward the 200 day mavg could present an opportunity if the level holds on a pull back.

New Zealand News Update (NZD/USD Chart)

• The RBNZ’s Governor Bollard said that he is concerned about the early ascent of the New Zealand’s interest rates and the price of the Kiwi. He suggested that the RBNZ would be willing to attempt more extreme measures, although he still believes conventional monetary policy will stimulate the economy.

The Kiwi has traded lower across the board to begin the session against a stronger Dollar and Aussie and further more on some anxiety ahead of the RBNZ’s rate decision later this week on the Wednesday the 10th in the US (Thurs in New Zealand.) Some comments for the RBNZ about the disappointment in the markets reaction to the prior rate cut (50 basis pts to 2.50%) and weak domestic demand have some analysts pricing in a rate cut although most concur with the consensus of a pause. On the chart below we see the NZD/USD pair trade lower the last few sessions, with some support ahead on the 50% retracement level (5/18 low >6/2 high) , with a number of resistance obstacles above, beginning with the 38.2% retracement at 63 cent figure and the 200 hr moving average above. The Kiwi is trading off session highs at this moment, below resistance as the USD has given back some of its early gains.

UK News Update

• The UK’s Blanchflower on the wires said that the UK’s CPI will drop below 1% further down the road in 2009.
• Lloyds Banking Group is expected to repay ~2.3 Billion Pounds in bailout funds back to the government, making them the first institution in Europe to repay the bailout funds.

The Lloyds comment helped the Sterling with a light bid off session lows, as the USD opened the week continuing its Friday rally.

Japan’s Trade Balance

A number of final Japanese economic data for April came in slightly worse than the survey, lead by the Current Account Total. The release was as follows:

Trade Balance - Survey:184.6B   Actual:18.43B   Prior:132.9B

Current Account Total – Survey:850B   Actual:630.5   Prior:1485.6B

Adjusted Current Account Total – Survey:960B   Actual:966.3   Prior:902.3B

Also released, for May however, was the Bank Lending Figures year-over-year at 3.9%, below the April figure at 4.2%. The Yen strengthened a few pips across the board on the release.

Fed’s Yellen On the wires: Must prepare for substantial shocks

US Fed’s Yellen cited Must prepare for ‘substantial shocks’; Fed is in ‘unchartered’ territoties; rising yields could be ‘disconcerting’ Credit market bubbles are ‘particularly dangerous’; Fed may need to reevaluate inflation objectives. Comments that markets do not always function prooerly. Low rates in future that are low and remain low may limit policy

Clear break of the 200 Day MA on the USD/JPY

Probably a good contender for next weeks trading, but interesting to look at none the less. The USD/JPY breaks out of a 16 day sideways pattern, breaking clearly over the 200 Day moving average (97.03). Trendline resistance is found at 98.20 area. Above this 99.50, and then 101.53 (near term high) will provide resistance. Down below, the 200 Day MA comes in at 97.03 and below this the 100 Day MA comes in at 95.88.

On the wires: National Bureau of Economic Research

US National Bureau of Economic Research cited “Way too early” to call the end of recession in the US, although there are signs of stabilization. Notes it will wait “a long time” before declaring the recession over, unclear whether the economy is pausing in a longer term decline.

On the wires: Vice President Biden on More stimulus

US VP Biden: Administration will announce plans on Monday to help increase economic stimulus for the summer. Biden says 3,600 stimulus projects are now underway around the country. Says there are encouraging signs in the economy but there is a “long way to go.”

On the wires: US Labor secretary rumor of job data error is false

US Labor secretary: rumor of job data error is false. Reminder earlier in the session rumors circulated that the Non farm payrolls numbers calculation was off by 100K

On the wires: ECB’s Stark Difficult to determine the global economy

European Central Bank’s Stark cited “Difficult to determine the global economy following the economic crisis.”

On the wires: Rumors fly about Non farm numbers being miscalculated

On the wires: Hearing rumor now circulating Payroll data may have been miscalculated on the order of 100K jobs