JPY: Japanese Yen is growing again

The Japanese Yen rate is traded with considerable growth at the Forex currency market on Wednesday.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, increasing moderately, and giving a pair buy signal. Stochastic Oscillator reversed in the neutral zone and is increasing, which indicates purchase of a pair.

Forex recommendations: in case of breakdown at the level of 81.20 the pair will go to 81.00 and 82.80. If downward breakdown does not take place, the pair will consolidate in the current range.

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 risks.

Japanese statistics released on 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.

As it was made public earlier, preliminary volume of retail sales in Japan reduced by 4.8% y/y in April against expectations of fall to -6.0% y/y; In addition, 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.

The minutes of the meeting of the Bank of Japan of 28 April which were made public earlier, stated that members of the Bank were requested to expand program of the quantitative easing due to the deterioration in the economic sentiments. The Bank also agree that it is required to focus on the downside economic risks and take further steps to support the process reconstruction after the earthquake.

Rating agency Moody's Investors Service announced intention to review Aa2 rating of the Japanese government and local bonds to give negative forecast –the JPY declined in respond.

 

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