JPY: Japanese Yen is growing while USD is weak

At the Forex currency market the Japanese Yen rate continues to consolidate on Wednesday, taking advantage the weakness of the USD which is under the pressure from external factors.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and started to descend, giving grounds for a pair sell signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: if current bearish sentiment will be maintained and in case of breakdown at the level of 82.00, traders’ targets will be the levels of 81.75 and 81.30.

On Wednesday morning the Bank of Japan reported a revision of its economic forecast, emphasizing that the pause in the economic recovery, observed in QIV last year was a temporality, and the economy will be back on the path of recovery in the nearest months. The regulator believes that one of the main factor   of support is an industrial production sector –its growth estimate was revised upward by the Bank of Japan in December and the regulator takes into account accumulation of capital by the companies, due to which investments flow into the sector will be stably moderate as yet. 

A two-day meeting of the Bank of Japan finished yesterday; at the meeting it was decided to keep interest rate in the previous target range of 0-0.1% per annum.  The head of the Bank of Japan Mr. Shirakawa noted in the follow- up comments that the country continues to move towards achieving price stability and at the moment both upside and downside risks to the economy are stabilized.

Monetary politician also stressed that Japan will resume recovery sooner or later; while the growth in QI 2011 still remains disputable. Shirakawa expressed confidence that export levels will also begin to increase.

We would remind that there are still deflation problems in the Country of the Rising Sun and the longer they last the harder will be the rehabilitation. The Yen, meanwhile, is traded in its own way, not paying much attention to the reaction of the Bank of Japan.

The Yen, which is still rising in price, remains a serious risk factor for the Japanese economy, making a situation in the exports sector more complicated.

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