JPY: Japanese Yen continues to consolidate

At the Forex currency market the Japanese Yen rate continues to grow on Monday.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes down, giving grounds for a pair sell signal. Stochastic Oscillator is still in the oversold zone and is not giving a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 83.00 the pair will go to 83.20 and 83.50. If the level of 82.60 is exceeded, traders’ targets will become the levels of 82.40 and 82.10.

The following Japanese data was released today:
– Prices for corporate services in November: -1.1% y/y against  -1.3% in November;
– Number of begun construction in November:  +6.8% y/y;– Confidence in small business in December: 45.9 against preliminary level of 45.8.
In addition, minutes of the two last meetings of the Bank of Japan, held on 28 of October and 5 of November were made public.

The documents emphasized that the effect of the strong yen alarmed the members of the Bank and it was stated that it is required to monitor downside risks in economy. In addition, the Central bank believes that it is also necessary to monitor the effect of the currency exchange rates on the world economy.

At the meeting which was held this week, the Bank of Japan announced the decision to leave interest rate unchanged in the target range of 0-0.1% per annum. The vote was unanimous. In the follow-up comments the regulator emphasized that assessment of economic situation remained unchanged and economic growth will be slow and small for some time. Nevertheless, Japanese economy continues to demonstrate signs of moderate recovery. In addition, the Bank of Japan lowered its forecasts for industrial output and drew attention to the need to keep track of the downward risks to the national economy.

We would remind that date released earlier showed that export volume in Japan increased by 9.1% y/y and 7.8% m/m in November, which indicates the rise in demand for products from both Europe and China. The demand was able to neutralize the negative impact caused by rise in Japanese Yen, which used to put considerable pressure on macro-economic indicators. 

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