JPY: Corrective sentiment for the pair USD/JPY is still strong

At the Forex currency market on Wednesday the Japanese Yen rate continued to rise at the Asian trading session, however it came to a halt by mid –day. Although the currency has high chances to resume upward movement.

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

Forex recommendations: traders’ targets today will be the levels of 82.80 and 92.50.

Board member of the Bank of Japan Mr. Suda noted today that recession in the country’s economy can be prolonged because the growth in the Yen in the past has significant impact on the export levels. According to him consumer sentiments also goes down as well as corporate sentiments.

Suda also believes that financial market remains volatile due to the large number of risks in the world. At the same time the Bank of Japan just need to be vigilant and monitor the situation in the economies of Eurozone and the USA.

Among other things monetary politician did not rule out that program of assets redemption can be expanded if required.
The data released yesterday showed that unemployment rate (5.1%) began to grow again – while the efforts of the local authorities are aimed at solving deflation problem and we were able to witness its initial results last week; however Japanese economy is in a difficult position, which will affected the fundamental indicators at least until the end of the QI next year.

We would remind that consumer prices continued to decline in October which became the twentieth consecutive reduction of the indicator; however the pace of decline has apparently slowed down. Economists noted that deflationary spiral began unwinding, following the introduction of high taxes on tobacco products in the country. CPI reduced by 0.6% y/y last month against the fall by 1.1% y/y in September. Nevertheless, Japanese economy will suffer from the consequences of deflation for a long time, which will result in slow pace of the GDP growth in the country and in the levels of exports too.

The head of the Bank of Japan, Mr. Shirakawa said at the beginning of the week that growth in the Yen had both positive and negative sides. Although strong Yen had an impact on the export levels, it stabilized International trading situation in the medium terms as it had an effected on the reduction of the import prices.

 

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