JPY: Japanese Yen remains in the narrow range at the beginning of the week

At the Forex currency market the Japanese Yen rate remains in the narrow range at the beginning of the week amid stable external environment.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it continues to move along the signal line preventing from forming a clear signal. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.

Forex recommendation: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 83.80 the pair will go to 83.50 and 83.10. If the level of 83.95 is exceeded buyers’ targets will be the levels of 84.10 and 84.40.

The following Japanese news was published today:
– Index of leading indicators (unrevised) reduced by 1.4 points m/m in October which was the fourth reduction in a row.
– Index of coincident indicators (unrevised) declined by 1.3 points m/m in October, which was the second reduction in a row.
The data has demonstrated once again that the economic growth in the Country of the rising Sun has slowed down.

Two- day meeting of the Bank of Japan started today; interest rate decision, and assessment of the current situation in the country’s economy will be adopted there. It is predicted that soft monetary policy of the regulator will remain unchanged, since there is no other option in the current situation. Yesterday’s comments of the head of the Bank Mr. Shirakawa will be of interest; he is expected to touch upon the subject of rapid increase in bond yield at the domestic market which has been observed recently.

Interest rate is likely to be preserved in the target range of 0-0.1% and the regulator will not make new decisions of easing.
Tankan report released last week also deserves consideration: it showed decline for the first time in 7 quarters – up to the level of 5 against the previous level of 8 and the forecast of 3. Quarterly report of the Bank of Japan which shows sentiments in the business circles of the country once again confirmed the fact that Japanese indicators of QIV will be weak, which will indicate downturn in economy. Market believes that Tankan indicator will go down to -2 by March 2011 which will mean that pessimists dominate over optimists in the business-class of Japan.

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