JPY: Japanese Yen rapidly regains strength
At the Forex currency market the Japanese Yen rate continues to grow steadily. Downward slide of the pair USD/JPY has been observed for the fourth consecutive session and it is difficult to find a logic explanation to the rapid growth of JPY, except for the fact that players drifted to the safe harbor after the yesterday’s publication of the U.S. statistics, which did not meet expectations.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY however it continues to slide down, confirming a previous sell signal for the pair. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.
Forex recommendations: if investors’ current bearish sentiments will be maintained traders’ targets on Thursday will become the levels of 82.80 and 82.50.
At the same time the situation in Japan is far from being tranquil; macro-economic forecasts for QIV are gloomy and current growth of the Yen only aggravates economic situation in Japan.
Market believes that total exports will decline in QIV; however in the early months of 2011 it is projected to recover.
We would remind that at the meeting yesterday the Bank of Japan announced decision to leave interest rate unchanged in the target range of 0-0.1% per annum. The vote was unanimous. In the follow-up comments the regulator emphasized that assessment of economic situation remained unchanged and economic growth will be slow and small for some time. Nevertheless, Japanese economy continues to demonstrate signs of moderate recovery. In addition, the Bank of Japan lowered its forecasts for industrial output and drew attention to the need to keep track of the downward risks to the national economy.
Meanwhile, yesterday’s statistics showed that Japanese economy has learnt to develop even in the conditions of the expensive national currency. Thus, export volume in Japan increased by 9.1% y/y and 7.8% m/m in November, which indicates the rise in demand for products from both Europe and China. The demand was able to neutralize the negative impact caused by Japanese Yen growth, which used to put considerable pressure on macro-economic indicators.
