JPY: Japanese Yen has regained partly after the fall caused by intervention

At the Forex currency market the Japanese Yen rate continues to strengthen gradually in the middle of the week, which was probably triggered by traders who were eager to sit out during the time of turbulence in the relatively safe harbours.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is moving along the signal line, not giving a clear signal; while volumes begun to decrease. Oscillator has come into oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.95, the pair will go to 76.90 and 76.80. If downward breakdown does not take place, the pair will consolidate at the current levels.

At two-day meeting which finished today, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October.  It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that afterwar highs of the YPY have been tested much more than once.

As it became known this week, revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y. Plus to this, according to the data released last week, index of economic observers rose to 45.9 points in October versus 45.3 points in September. This has been the first growth of the index in three months. Judging by statistics Japanese economy has fully recovered from disaster in March. However, negative impact of the expensive national currency is still very strong and it is not clear yet how long current balance in economy will persist.

Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of  +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%. Japanese economy is still dependant on the external demand, which cannot give much hope at the moment.