Forex Analytics from LiteForex of 02.11.10: JPY: Japanese Yen continues to decline

At the Forex currency market the Japanese Yen rate continues to go down on Tuesday as earlier the currency again approached the 15 years highs.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it goes up giving grounds for a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 80.80 traders’ targets will be the levels of   81.10 and 81.50.

Japanese Finance Minister Mr. Noda noted today that currency market movement has a negative impact on the risks in economy as well as the concerns regarding external economy state. In his view, Japanese economy is stagnating now and its growth will be resumed only in case of the appropriate policy.

He also stressed that authorities take all efforts to fight deflation.

The minutes of the Bank of Japan last meeting was released today. It says that some of the bank members believe that the production volume can reduce sharply in Japan in QIV and the recovery time frame looks very blurry.
Many members of the Bank are concerned about the high rate of the Yen.

As it was noted earlier the Bank of Japan believe that Japanese economy will be back on the path of the moderate growth in 2011 while basic inflation average forecast still amounts to 0.4%. Average forecast of the actual GDP level for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in July. The head of the Bank Shirakawa noted that monetary policy easing will be carried more active than before as the economy proceeds along the course of recovery. 

As the data today evidenced average basic salary in Japan increased by 0.1% y/y in September against the previous decline by 0.2% which became the first growth factor over the past 25 months.

It became known on Friday that unemployment rate in September was 5.0% against 5.1% in August which became the only bright spot in Friday’s block of statistics. Other data was too poor: industrial production volume in QIII: -1.9% q/q against +1.5% in QII; net national CPI in September: 1.1% y/y against 1.0% in August; actual household expenditures in September remained unchanged against +1.7% in August. Thus, based on the statistics it can be said that deflation spiral in the Japanese economy continues to twist despite all measures taken by the authorities.

 

[More]