Forex analytics of LiteForex of 25.10.2010: JPY: Japanese Yen is trying to reach new maxima on Monday

At the beginning of the week in the currency market (forex) JPY is growing rapidly against the background of the G20 decision and generally positive external background.

Forex (forex) Forecast: MACD indicator is in the negative area for the pair USD / JPY on Monday and it decreases which gives a signal to sell the pair. The signal of stochastic oscillator today is the same being in oversold area.

Forex (forex) recommendations: if the level of 80.65 is broken the pair will go to 80.00 and then to a new minimum of 79.75.

The statistics of Japan released on Monday morning is fairly positive (the level of trade balance rose by 54.0% per annum in September up to Y797, 01 billion; the level of exports rose by 14.4% y/y in September which is the tenth month of growth in a row; the level of imports in Japan increased by 9,9% y / y in September which is a continuation of the indicator growing trend the ninth month in a row).

According to the text of monthly report of Japanese authorities released earlier the economic situation of Japan is deteriorating - the last time similar assessment was voiced in the summer of 2008. In addition the first time in 2 months the production forecast estimate is reduced - weak global economy does not contribute to the demand for high-tech products produced by Japan.
As it is noted in the report the unemployment situation remains difficult. Levels of unemployment are high and the prospects so far are uncertain. The main factor of downside risks for corporate profits is low levels of exports and industrial production. The increase of JPY exerts a negative impact on economic sentiments.

Last week Japanese Finance Minister Noda noted that the situation in the labor market was still extremely heavy but the main problem of the authorities at the moment was deflation.

The governor of the Bank of Japan, Mr. Shirakawa, said earlier that the regulator continued to watch carefully the effect on the growth of JPY and that the currency rate might be influenced by quite a number of factors
 
Earlier Noda noted that during upcoming summits the country would confirm its need to stabilize the financial sector and foreign exchange market and would clarify its position concerning currency fluctuations; he said that the competitive devaluation damages the economy.

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