JPY: Japanese Yen is being corrected after the rise

At the Forex currency market the Japanese Yen rate declines on Thursday after steady growth this week.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and go down sluggishly, giving a pair sell signal. Stochastic Oscillator remains in the oversold zone, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 80.51 the pair will go to 80.30 and 80.45. If upward breakdown does not take place, the pair will consolidate in the current range. It became known today that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%.

This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic.
According to the data released yesterday trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April. It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.

The head of the Bank of Japan Mr. Shirakawa said in the middle of the week that economy of the country is still under severe pressure and its recovery is expected in the second half of the fiscal year. According to him shortage in supply is decreasing faster than expected; however excessive focus on the level of business activity can lead to risksJapanese statistics released last Tuesday showed that industrial output in Japan was favourable, however below the forecast. Unemployment rate increased to 4.7%. In addition, household spending continues to demonstrate negative dynamics.In addition, preliminary volume of retail sales in Japan reduced by 4.8% y/y in April against expectations of fall to -6.0% y/y; net CPI in Japan rose by 0.1% y/y in May against the increase of 0.2% in April. Japan has confronted with the rise in inflation for the first time over 28 months, which is crucial for the economy; however, it requires confirmation over the next few months. Japanese consumer prices grew by 0.6% y/y excluding food, and prices for utilities and food skyrocketed.

Prime Minister of Japan Naoto Khan is going to resign as soon as reconstruction of the country after the earthquake will gain stability. Some markets have been discussing such possibility for some time already, while political forces demand Khan’s resignation.

 

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