USD/JPY Daily Fundamental Analysis for May 30, 2011

By ForexMansion.com

The USD/JPY pair ended last week with losses after the Japanese yen was able to cover some of its previous losses against greenback. Japan's CPI exited deflation for the first time in 28 months, which increased demand for the Japanese currency.

The dollar lost most of its previous gains against the yen, after the annualized GDP for Q1 remained at 1.8%, adding to signs that the Feds won't start the monetary tightening any time soon.

The Bank of Japan kept interest rate unchanged at virtually zero, in the bank's efforts to support the Japanese economy from the March 11 quake aftermath. The Japanese policy makers kept asset-purchase fund unchanged at 10 trillion yen, in addition to the credit-loan program which was kept steady at 30 trillion yen.

Japanwill start the week at 01:00 GMT with the small business confidence for May, where the previous reading was 36.1. On the other hand, the annual construction orders for April will be published at 05:00 GMT, and it had a previous reading of –11.0%, while the annual housing starts for April is expected to decline by 3.9% after the prior decline of 2.4%. 

Meanwhile, U.S. markets will be out on Memorial Day weekend and accordingly the volume of trading is expected lower but might increase the volatility. 

Originally posted here

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