JPY: Japanese yen continues to lose positions, helping out country’s economy

The Japanese Yen rate continues to retreat at the Forex currency market on Tuesday although in the morning some increase in the Yen was observed in Asia amid the pressure exerted on the USD. However as long as the JPY loses weight, Japanese economy can continue to fight off current problems, not being distracted by the verbal interventions against the currency.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY today and it goes up, confirming a previous buy signal for the pair. Stochastic Oscillator is giving a similar signal, being in the overbought zone.

Forex recommendations: if the current external background is maintained and in case of breakdown at the level of 83.25, the pair will go to 83.75 and 84.00.

Worth noting however that Finance Minister of Japan Mr. Noda reiterated his usual morning mantra this morning: he stressed that in case of necessity authorities will take all measures to settle domestic currency rate at the currency market, including intervention. In addition, Noda also noted that the target of the intervention in September was restrictions of currencies fluctuation only; authorities did not plan to carry out competitive devaluation.   

Minister of Economy Mr. Qaeda noted earlier this week that Japanese economy will remain weak for some time; therefore risks should be carefully monitored. At the same time according to the politician, GDP rise could have been more rapid in QIII if only the rate of the Yen were not so high as to put pressure on the exports and imports levels.  

The Bank of Japan maintained interest rate in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan  announced the purchase of the mortgage investment trusts with the rating not lower than AA.

According to the data released at the beginning of the week, industrial production in Japan reduced by 1.6% in September against the previous level of 1.9%. However, the declining trend has been in effect for the 4th consecutive months. Revised data for QIII showed -1.8% (preliminary index was -1.9%) against the growth by 1.5% in QII.

In addition it became known that real GDP in Japan increased by 0.9% q/q (+3.9% y/y) in QIII. However it should be understood that such fair growth of the domestic economy took place owing only to the measures of stimulation.

 

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