Forex Analytics from LiteForex of 09.11.10: JPY: Japanese Yen goes up redeeming losses sustained in pairing with USD

At the Forex currency market the Japanese Yen rate continues growing trend that started earlier.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it goes down, giving a pair sell signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

 Forex recommendations: in case of breakdown at the level of 80.60 the pair will go to 80.40 and 80.00.
The following Japanese data was released today:
– Coincident indicators index in September: 102, as expected
– Bank lending: -2.0% y/y in October, decline has been going on for 11 consecutive month;;
– Overall balance of current account is +24.3% y/y to +Y1.96 trillion in September;
 – Economic observers index in October 40.2 in September; the decline continues for the third consecutive month;

Thus, Japan’s economic recovery rate continues to slowdown, at that deceleration is sharp and rapid.
It was noted earlier the Bank of Japan expects 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. 

Such prospect seems questionable at the moment, considering the latest statistics and taking into account that deflation continues to progress.
The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan announced purchase of the mortgage investment trusts with the rating not lower than AA.
 

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