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Forex - USD/JPY weekly outlook: February 23 - 27

Published 02/22/2015, 06:57 AM
© Reuters.  Dollar little changed vs. yen on Friday, euro gains
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Investing.com - The dollar was little changed against the yen on Friday, while the euro pushed higher after Greece secured an agreement with the euro zone to extend its bailout by four months.

USD/JPY ended Friday’s session at 119.02, little changed for the day, while EUR/JPY was up 0.18% to 135.47.

The euro zone approved the extension of Greece’s €240 billion bailout, removing concerns that the country would face a liquidity crunch when its current bailout agreement expired at the end of the month.

Markets have been hit by growing concerns over a possible Greek exit from the euro area if the country missed a debt payment.

Athens has until Monday to present a list of reforms to be approved by the country’s creditors in order to secure the four-month bailout extension, which will give it more time to reach a lasting agreement with its creditors.

Earlier Friday, data showed that euro zone private sector activity expanded at the fastest pace in seven months in February, but firms continued cutting prices, underlining concerns over persistently low levels of inflation.

The Markit's composite flash purchasing managers' index, which measures activity in the manufacturing and services sectors, rose to 53.5, the highest since July 2014 from a final reading of 52.6 last month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.40 late Friday.

Earlier in the week, the minutes of the Federal Reserve’s January meeting showed that some officials thought that raising rates too soon could weigh on the U.S. economic recovery, and that a deterioration in the global economic outlook could also pose a threat to the recovery.

In the coming week, Tuesday’s testimony by Fed Chair Janet Yellen to the Senate Banking Committee will be closely watched for any indication on when U.S. interest rates may start to rise.

Traders will also be watching Monday’s deadline on Greece's financial rescue package.

Investing.com has compiled a list of these and other significant events likely to affect the markets in the week ahead.

Monday, February 23

The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.

Later Monday, the U.S. is to publish a report on existing home sales.

Tuesday, February 24

The U.S. is to produce a private sector report on consumer confidence. Meanwhile, Fed Chair Janet Yellen is to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington.

Wednesday, February 25

The U.S. is to release data on new home sales.

Thursday, February 26

The U.S. is to release data on the consumer price index, as well as reports on initial jobless claims and durable goods orders.

Friday, February 27

Japan is to release a string of data, including reports on household spending, inflation, retail sales and industrial production.

The U.S. is to round up the week with revised data on fourth quarter growth, as well as reports on pending home sales, business activity in the Chicago region and consumer sentiment.

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