JPY: Japanese Yen is getting close to highs of March

At the Forex currency market the Japanese Yen rate continues to grow on Tuesday, since the JPY acts as a safe harbor amid uncertainty in the market. 

Forex forecast: MACD indicator has crossed the signal line from top to bottom, giving a pair sell signal. Stochastic Oscillator has come back into oversold zone and gives a similar signal.

Forex recommendations: in case of breakdown at the level of 80.85 the pair will go to 80.60 and 80.40.

Markets in Japan are closed today due to the “Gold week”

Japan considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Earlier the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

As it became known earlier, the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. Japanese data released after that was also mixed: unemployment rate remained at the previous level of 4.6% in March; preliminary data on industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; net CPI decreased by 0.1% y/y in march which became the 25th fact of reduction in a row; household spending decreased by 8.5% y/y in march against the previous decline by 0.2%.

Last week it was made public that the head of the Bank of Japan Mr. Shirakawa said that following the results of quarters I and II,  it can be expected that level of GDP will decline due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Current growth of the JPY was caused by purely external factors.

[More]