JPY: Demand for Japanese Yen does not go down

At the Forex currency market the Japanese Yen rate remains high, due to traders’ interest  to the currency, caused by obscure external background.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, and is going up, giving a buy signal; volumes are decreasing. Stochastic Oscillator started to reverse in the neutral zone, shaping a sell signal.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to 76.50 and 76.40. If downward breakdown does not take place, the pair will consolidate at the current levels.

Anti-inflation strategy is nearly ready in Japan; the country is prepared to announce additional infusion of 2 trillion yen to help companies-exporters which suffered from overvalued national currency. Another 2 trillion yen will be used in the employment sector.

Thus, government will use currency reserves that are in the Japanese Bank of International Cooperation at the moment.

Yesterday the head of the Bank of Japan said that it is necessary to monitor carefully the impact of the European debt crisis on the Japanese economy, including Forex market and commodity platforms. According to him situation in Japan is stable at the moment and authorities expect revival of the economic growth soon.

From the fundamental point of view Japanese economy is stable as far as it is possible after the disaster in March. However, the impact of the expensive Yen can provoke resumption of talk about mitigation of fiscal conditions. At a two-day meeting last week the Bank of Japan left interest rate the level of 0.10% per annum, as expected. Regulator has commented that he is going to continue lending program until 30 April 2012. The Bank has refrained additional stimulation of the economy deciding to wait for the more complete results. Volume of assets purchase was maintained at 50 trillion yen.

Final orders for industrial equipment in Japan increased by 20.1% in September against the growth of 20.3% in August;  Association of machine-tool construction industry of Japan stated that last month the index had reached the lowest level since 2009. According to the data released yesterday revised industrial production in Japan rose by 0.6% m/m (+0.4% y/y) in August; below expectations.

 Government has to take measures as the Yen increased by 6% this year.