JPY: Japanese Yen continues making attempts of correction

The Japanese Yen rate continues making attempts of correction from local lows in pairing with USD at the Forex currency market on Monday amid Dollar’s weakness on the back of 2H budget decision difficulties in USA.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is rising, giving a pair buy signal. Stochastic Oscillator left the overbought zone today and is sliding in the neutral zone, giving a pair sell signal. 

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakup at the level of 85.00 the pair will go to 85.10 and 85.30. If the level of 84.60 is broken down, sellers’ targets will become the level of 84.30.

Current situation in Japan remains fuzzy: after a new series of earthquaking and another atomic power station under the threat of destruction, sentiment in the country is far from stable. According to the police data, the most injured are Miyagi (8017 people dead), Iwate (3811 people), and Fukushima (1226 people) prefectures. 

According to the statistics released on Monday, Machinery orders in Japan decreased by 2.3% m/m in February against an increase by 4.2% m/m before. The indicator gives an idea of volumes of 3-6 months’ investments in industry. Thereby expenditures’ cut threatens Japanese economy to say nothing of the difficult situation in business after earthquakes and tsunami.

Statistics released earlier turned out to be positive (unemployment rate totaled to 4.6% in February, not reviewed; current account balance increased by 3.0% y/y in February against the decrease by 47.6% in January; import levels increased 3.3% y/y, export grew 4.1% y/y).

Last week according to BOJ decision the key interest rate was left unchanged at the historical low of 0.0-1% per annum. The regulator stated, that national economy remains under strong downside pressure expected in the meantime. Later a moderate recovery will take place. According to observers, monetary policy tightening should not be expected until mid-2012, and stimulus programs will not be cut down for the nearest 6 months at least.

As noted by the officials, financial markets are in whole stable whereas a number of regions experiences production cuts and small business weakness. 
Besides BOJ announced a new plan of extra financing amounting to Y1 trln.

 

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