JPY: Japanese Yen does not change positions at the end of the week

The Japanese Yen rate is traded in the previous range at the Forex currency market on Friday: Tension which continues in the external environment makes the Yen act as protective asset, on the one hand; and on the other hand, high rate of the Yen prevents recovery of Japanese economy in such a difficult period of time.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator started to descend in the neutral zone, giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 76.40, the pair will go to 76.20 and 76.00. If   downward breakdown does not take place the pair will consolidate close to the current levels.

Representative of the monetary authorities of Japan, Mr. Noda said this morning that government is elaborating solution for the problem of expensive Yen and it is possible that the third edition of the emergency budget will contain measures which will support economy that suffers from impact of expensive YPY. According to the politician, close cooperation of the Big Seven and of Big 20 can contribute to full reversal of the ascending channel of the JPY.

It became known yesterday that leading indicators index in Japan was left unrevised, showing growth by 3.8 points against the rise of 3.4 points in May. At the same time, coincident indicators index in Japan increased by 2.7 points in June against the growth of 2.6 points in May.

The data released earlier showed that composite index of consumer confidence in Japan increased to 37.0 points in July against the value of 35.3 points in June. It also became known that current account surplus in Japan was -50.2% y/y in June, Y526.9 billion against decline of 51.7% y/y in May. It became known also that revised volume of industrial output in Japan increased by 3.8% m/m in June against preliminary value of +3.9% m/m. As it can be seen, it is slightly below the forecast, however in general, it is a good indication, despite the fact that capacity utilization in June was twice as low as the level of May.

According to statistics released at the beginning of the week, real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the country of the rising sun said that Japan will demonstrate the rise of economy next quarter. Monetary politician regards the fall in Q2 as a temporary phenomena; he said that it is required to monitor risks, caused by expensive Yen. In addition, it is not possible to resolve the issue of deflation immediately and prices in the country will recover gradually. Statistics released earlier was mixed: unemployment rate in June was at the level of 4.6%; household spending fell by 4.2% y/y in June; net national CPI increased by 0.4% in June against the forecast of +0.5%. Exports in Japan decreased by 1.6% y/y in June against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been of 11.0% y/y.