JPY: Japanese Yen is being corrected moderately

At the Forex currency market the Japanese Yen rate is being corrected moderately on Tuesday, although yesterday it has reached   highs of March once again.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shaping a sell signal; volumes are high. Stochastic Oscillator tends to come out of the oversold zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 77.50, the pair will go to 77.70 and 78.05.

However, if upward breakthrough does not take place, the pair might drop to 76.90.Speculation that arises more and more often at the market speaks about possibility of intervention by the Bank of Japan – there is no decision on the matter so far; however the meeting of the regulator will start on Thursday and  the levels at which the Bank of Japan will interfere with the trading process will be specified there.

The data released this morning showed that preliminary average wages in Japan fell by 0.8% y/y in June against the forecast of growth by 0.5% y/y.At the last meeting, the Bank of Japan decided to leave interest rate unchanged in the target range of 0-0.1% per annum, as expected.Lending program was also left unchanged in the amount of 30 trillion yen.

According to the Bank estimates, 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%.According to the Finance Minister Mr. Noda, current dynamics of the Yen does not correspond to fundamental indicators; however it is necessary to carry out thorough analysis to decide for how long actual situation at Forex can be left unattended.

Representative of the Bank of Japan Mr. Yamaguchi said that high rate of the JPY had no effect on the actual state of economy.The data released at the end of last week showed that 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 last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.

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