JPY: Japanese Yen keeps moving in the offset

At the Forex currency market the Japanese Yen rate remains in the offset channel.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to decline, maintaining a pair sell signal. Stochastic Oscillator remains in the overbought zone today, moving along.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.00 the pair will go to 81.20 and 81.50. If the level of 80.60 is exceeded, traders’ targets will be the levels of 80.40 and 80.30/15.

Representative of the Bank of Japan Mr. Miyao said this morning that the regulator shall carefully trace all risk factors for the process of Japanese economic recovery. In addition, time frame and volumes of reconstruction is not known yet which makes obscure further economic outlooks of the Country of the Rising Sun.

It is obvious that aftermath of the earthquake in March will impact on the economy – according to the estimates of the World Bank disasters in Japan in March will reduce GDP of the country in the middle of this year by 0.25%-0.5% ; however it is possible that rapid economic growth will follow after that.

Earth tremors occurred in Tokyo this morning.

We would remind that the Yen was shaken up last week: countries of the “ Big Seven” agreed to start currency intervention together in order to ease pressure of the expensive Yen on the weak economy of Japan. Therefore, on 18 March authorities of the USA, Great Britain, Canada and ECB have joined the Bank of Japan- the intervention started at 9 am Tokyo time. Half an hour later the JPY collapsed by 3.1% in pairing the USD and continued to fall further.

As noted by the representative of the Bank of Japan Noda, countries of B7 conducted intervention, using the pair Euro/Yan. Currency intervention was not aimed at certain levels.

The situation remains tense in Japan: it became known earlier that radiation background near the atomic power station in Fukishima is at extremely high level due to the accident at the power generating unit caused by the earthquake and tsunami; smoke can be seen over the third reactor. 

 

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