JPY: Japanese Yen is smoothly tending upward

At the Forex currency market the Japanese Yen rate is smoothly sliding upward.

Forex forecast: MACD indicator for the pair USD/JPY is traded in the positive area and is going down, giving a sell signal; volumes are minimal. Oscillator remains in the oversold zone and is giving a sell signal; although it tends to go out of the zone.

Forex recommendations: in case of breakdown at the level of 76.70, the pair will go to 76.65 and 76.50. If downward breakdown does not take place, the pair will consolidate at the current levels. It became known today that index of coincident indicators in Japan was revised up to 1.3 points in September against previous level of -1.4 points.

According to the minutes of the last meeting of the Bank of Japan, acquisition of two-year government bonds is an effective method of influence on the currency market; at the same time state of affairs in Eurozone has enormous affect as well. In addition, descending risks have increased for Japanese economy due to the growing Yen and collapse of the stock markets.

At two-day meeting which finished yesterday, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October.  It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once. Japanese economy is still strongly dependant on the external demand, which is not very reliable at the moment, which encourages Yen to grow.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y.

Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of  +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.