JPY: Japanese Yen maintains intention to strengthen

The Japanese Yen rate continues to move slowly towards strengthening at the Forex currency market on Wednesday morning.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, and started to increase, giving a pair buy signal. Stochastic Oscillator is moving sluggishly along the signal line in the neutral zone, not giving a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.60 the pair will go to 81.45 and 81.25. If downward breakdown does not take place the pair will consolidate in the current range.

Minutes of the Bank of Japan meeting of 28 April was released today, it states that the Bank members were requested to expand program of the quantitative easing due to the deterioration in the economic sentiments. In addition the Bank agreed that it is required to focus on the downside economic risks and take further steps to support the process reconstruction after the earthquake.
The following Japanese data was released on Wednesday:
– Volume of imports increased by 8.9% y/y in April against the forecast of growth by 12.8% and the previous rise by 11.9%;
– Volume of exports fell by 12.5% in April against the forecast of reduction by 12.7% and previous decline of 2.2%.

Japanese Economy Minister is confident that the economy of the Country of the Rising Sun is very easy to adapt to various changes and prior to the earthquake the state of economy had improved. “We are making progress in the fight against limited supply and by the end of this fiscal year GDP will increase by 1%” –he said. The Minister is also assured that economy can avoid recession. Ex-deputy head of the Bank of Japan Mr. Muto said this morning that national economy is weak and will reach the bottom in QIII this year. Future economic prospects are vague. 

 It was made public earlier that consumer confidence fell to 33.1 points in April against the level of 38.6 points in March, at the same time index of CGPI rose by 0.9% ?/? in April against the growth by 0.6% m/m in March. According to the data released earlier, current account balance in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released earlier showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

Macro-economic statistics for March which have been released this week shows weakness of the economy; index of coincident indicators in Japan fell by 3.3% m/m in May against the preliminary estimate of 3.2%; index of leading indicators in Japan decreased by 3.9% m/m in March versus preliminary estimate of -4.5%.

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