Forex Analytics from LiteForex of 12.11.10: JPY: Japanese Yen confidently recovers losses

The Japanese Yen rate goes up steadily at the Forex currency market on Friday, recovering losses of the last three days, when the Dollar was
supported by the external background.

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

Forex recommendations: in case of breakdown at the level of 81.90, traders'targets will become the levels of 81.60 and 81.20.

The Japanese GDP growth amounted to 2.5% y/y in QIII (the indicator increased by 1.5% in QII) - this is the economists' average forecast. The
data will be published on 15 November, on Monday. However market believes that after some acceleration in QIII, Japanese economy may slow down by the end of the year, as high rate of the JPY affects exports' levels.If this forecast proves to be correct, the Bank of Japan will have to take
additional measures to support economy.

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 the purchase of the mortgage investment trusts with the rating not lower than AA.

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
data released on Thursday is ambiguous: number of orders in the machine-building sector in September is -10% against +10.1% in August; while
prices index for the industrial goods in October: +0.9% y/y against -0.1% in September;

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