JPY: Japanese Yen remains under pressure

The Japanese Yen remains under pressure at the Forex currency market on Monday. It is a day off in Japan today and markets are closed due to the celebration of the vernal equinox.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and goes down, giving a pair sell signal. Stochastic oscillator goes up in the neutral zone, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 80.90 the pair will go to 80.20 and 81.50.
Japanese markets are closed today.

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 can conduct intervention, using the pair Euro/Yan. Currency intervention is 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.

Central Bank of Japan has repurchased debt securities from the market in the amount of 2 trillion yen on 17-18 March. Closure of financial market due to stock market panic is not planned. In addition, starting from 22 March the Bank of Japan intends to offer bonds to the market in the amount of 300 billion yen – received funds will be spent for reconstruction. In addition, Central Bank has already poured $87.5 billion to reassure stock markets where the panic started last week. Private Banks can count on this fund to issue short term loans. The regulator will also allocate $220 billion to rebuild national economy, which has not been strong before, and recent developments will become extremely hard burden for it.

Worth noting that the Bank of Japan decided earlier to pour Y3.5 trillion to the market to maintain liquidity level of one-day operations.

 

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