USD/JPY Daily Fundamental Analysis for July 19, 2011

The USD/JPY pair traded near its lowest level in four months, as the EU debt crisis fueled risk aversion which increased demand for lower yielding currencies, opening the way for the Japanese currency to keep its gain against the dollar.

The Japanese yen faced more pressure since it traded near its highest levels against the dollar since the intervention, fueling concerns that the BOJ may act again to prevent the yen from further gains.

The recent fundamentals from the Japanese economy helped the yen to find more buyers, as the GDP and industrial productions figures came better than expected, increasing signs of recovery from the March 11 quake.

The U.S. economy will release on Tuesday at 12:30 GMT the housing starts index for June, where the previous reading was at 560 thousand and expected to show a rise of 2.5% to 574 thousand.

The building permits index is expected to drop by 1.5% to 600 thousand from 612 thousand.

Written by

Forex Mansion