JPY: Japanese Yen remains within the range
At the Forex currency market on Tuesday morning the Japanese Yen rate is still within 76.30-77.35; the trading range, which had been established over the past few days.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is going down, giving a sell signal. Stochastic Oscillator has come out of the oversold zone, and is going upward, giving a buy signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 76.90, the pair will go to 77.20 and 77.45. If upward breakdown does not take place the pair will consolidate close to the current levels.
According to statistics released at the beginning of the week, real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the country of the rising sun said that Japan will demonstrate the rise of economy next quarter. Monetary politician regards the fall in Q2 as a temporary phenomena; he said that it is required to monitor risks, caused by expensive Yen. In addition, it is not possible to resolve the issue of deflation immediately and prices in the country will recover gradually. Statistics released earlier was mixed: unemployment rate in June was at the level of 4.6%; household spending fell by 4.2% y/y in June; net national CPI increased by 0.4% in June against the forecast of +0.5%. Exports in Japan decreased by 1.6% y/y in June against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been of 11.0% y/y.
The data released earlier showed that composite index of consumer confidence in Japan increased to 37.0 points in July against the value of 35.3 points in June. It also became known yesterday that current account surplus in Japan was -50.2% y/y in June, Y526.9 billion against decline of 51.7% y/y in May. It became known today that revised volume of industrial output in Japan increased by 3.8% m/m in June against preliminary value of +3.9% m/m. . As it can be seen it is slightly below the forecast, however in general, it is a good indication, despite the fact that capacity utilization in June was twice as low as the level of May. According to statistics released earlier, preliminary index of leading indicators increased to 103.2 points in June against the previous level of 99.4 points. At the same time preliminary index of coincident indicators in June was at the level of 108.6 points against the forecast of 108.7 points. Statistics is positive, it demonstrates that Japanese economy is moving towards recovery although slowly and with halts.
According to the previous estimates of the Bank of Japan, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%.
Japanese Finance Minister Noda said this morning that the JPY moves in one direction at Forex and the Bank of Japan is closely monitoring all changes. Last weekend, Japanese Finance Minister Noda said that during the meeting of the Big Seven he clarified the importance of the conducted currency intervention which had been aimed to reduce the rise of the national currency. At the same time he did not indicate whether Japan is going to conduct currency intervention in the future. Despite liquidity that has been infused in the market, the Yen continues to grow again, using external instability as an activator.
