Forecast: How will Japan trade balance data impact USD/JPY?

ForexNewsNow | Published on August 24, 2010 at 8:06 am

Japan trade balance - a heap of Japanese yenNEW YORK (Forex News Now) – Japan’s Ministry of Finance is due on Tuesday to release a key report on the country’s trade balance in July, in one of the day’s major real time forex news events.

The Ministry is expected to say that Japan’s trade surplus climbed to JPY 0.47 trillion during the month, up from JPY 0.46 trillion, according to two currency market trading news outlets.

The bureau is scheduled to publish the data at 11:50 P.M. GMT; as such, the report is likely to dominate European afternoon currency trading.

According to forex analysis, if the surplus widens more than forecast, the report could push USD/JPY toward support around 81.77, the low of May 29, 1995.

But should the data show a smaller-than-expected increase, none at all, or even a contraction of the surplus, the currency pair could be could be lifted toward resistance around the daily high, 85.19.

In any event, the report is likely to be a key feature of the day’s indicator analysis.



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