Forex - USD/JPY weekly outlook: June 13-17

Investing.com – Last week saw the U.S. dollar pull away from a month low against the yen after Japan’s finance minister Yoshihiko Noda said that he was closely watching the yen’s appreciation, triggering speculation the country could intervene in the currency market.

USD/JPY hit 79.69 on Wednesday, the pair’s lowest since May 5; the pair subsequently consolidated at 80.30 by close of trade on Friday, edging 0.1% higher over the week.

The pair is likely to find short-term support at 79.56, the low of May 5 and resistance at 81.00, the high of June 3.

Finance minister Noda said on Wednesday that he was monitoring the yen’s gains in the forex market, blaming the dollar's decline on market views about the outlook of the U.S. economy.

"I think views on the U.S. economy may have affected the market, and I will closely watch market movements," Noda told a news conference after a cabinet meeting.

It was the first time in a month Noda said he’s watching the markets, a comment that Japanese officials have made in the past as a signal they may intervene in the currency market. 

Meanwhile, revised data released Thursday showed Japan's economy contracted by 0.9% in the first quarter, unchanged from the initial estimate as the March 11 earthquake and tsunami disrupted factory production.

On an annualized basis, the economy contracted a revised 3.5%, more than the 3.0% fall forecast by economists. The government initially estimated a preliminary contraction of 3.7% in May.

Looking ahead to the coming week, U.S. data on retail sales and consumer price inflation will be a focus of attention. Meanwhile, the Bank of Japan is to announce its interest rate decision.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 13

Japan is to publish government data on core machinery orders, a leading indicator of production.

In the U.S., Federal Reserve Bank of Dallas President Richard Fisher is to speak at a public engagement.

Tuesday, June 14

The Bank of Japan is to announce a decision on its key interest rate. The announcement will be followed by a closely watched press conference. The country is also to release revised data on industrial production as well as a report on manufacturing conditions, a leading indicator of manufacturing production.

Later in the day, the U.S. is to produce official data on producer price inflation, a leading indicator of consumer inflation. The country is also due to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Wednesday, June 15

The BoJ is to publish its monthly report, which outlines the data policymakers examined when making the latest interest rate decision.

Meanwhile, the U.S. is to release a flurry of data, including reports on consumer price inflation, industrial production and the capacity utilization rate, leading indicators of economic health.

The U.S. is also to publish government data on the balance of domestic and foreign investment as well as official data on crude oil inventories and manufacturing activity in New York state.

Thursday, June 16

The U.S. is to publish its weekly report on initial jobless claims as well as official data on building permits and housing starts, an excellent gauge of future construction activity. The country is also to produce data on its current account and natural gas stockpiles, while the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity.

Later in the day, the BoJ is to publish the minutes of its most recent policy setting meeting. The minutes contain in-depth insights into the economic conditions that influenced the decision on where to set interest rates.

Friday, June 17

The U.S. is to round up the week with a report on an index of leading indicators, which is designed to predict the direction of the economy, while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.