Forex analytics of LiteForex of 27.10.2010: JPY: Yen continues to decline; additional pressure comes from Japanese authorities
On Wednesday in the currency market (forex) JPY continues to decline.
Forex (forex) Forecast: MACD indicator is in the positive area for the pair USD / JPY and it increases which confirms previous signal to buy the pair. The signal of stochastic oscillator today is the same being in the overbought area.
Forex (forex) recommendations: the targets of the buyers will be 82.10 and 82.40.
Apart from the obvious news flow support of USD an additional factor of pressure on the JPY are now market rumors about the possibility of extending currency intervention by the Bank of Japan as the yen has approached the local maxima again.
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.
Japanese Finance Minister Noda in the morning continues to charge the market with his confidence that the economy of the country is all right: today he has said that Japan will seek the cooperation with European countries and the United States only if the fluctuations in the currency market are too harsh.
In his opinion so far Japan is interested in the resistance to further USD weakness and thereby to the increase of JPY.
On Tuesday a representative of The Japan Iron and Steel Federation Mr. Hayashida has noted that the optimal rate of the yen is now at the level of 90.0.
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