JPY: Japanese Yen has shifted to strengthening again

Japanese Yen rate continues to strengthen gradually at the Forex currency market on Monday morning.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and it goes up, giving a buy signal, and preparing to break through the signal line. Stochastic Oscillator continues to go up in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to ? 76.20 and 76.00. If   downward breakdown does not take place, the pair will aim to 77.40.

The Yen continues to grow at the beginning of the week, despite technical signals, because demand for the currency as a safe harbor is still preserved.

As it became known earlier number of begun housing construction in Japan rose by 21.2% in July against the growth of 5.8% in June. In addition, preliminary volume of industrial output in Japan increased by 0.6% m/m in July against the growth of 3.8% a month earlier. The data was weak, which was to the advantage of the growing Yen, which normally moves in the direction opposite to the markets’ sentiment. New Prime-Minister of Japan Yosihiko Noda has formed a new cabinet: particularly, Jun Adzumi has become a new Finance Minister.  The data released earlier showed that capital expenditures excluding financial companies in Japan fell by 7.8% y/y  in Q2 against the growth of 3.0% y/y a quarter earlier.

According to previous estimates of the Bank of Japan, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%. 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 next quarter Japan will demonstrate the rise of economy.

The fight against expensive JPY is one of the three objectives of a new Cabinet.