JPY: Japanese Yen reverted to decline after correction

At the Forex currency market the Japanese Yen rate reverted to decline after three days of correction.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is going up, giving a pair buy signal. Stochastic Oscillator goes down today in the neutral area and started to approach oversold zone, continuing to give a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 84.25 the pair will go to 84.50 and 84.75. If upward breakdown does not take place the pair will consolidate at the current levels.

Japanese Finance Minister Mr. Yosano noted today that economic recession after the earthquake is temporary and by the end of the year the situation can improve in the Country of the Rising Sun. The main factor of uncertainty, according to Yosano, is instability of power supply and its possible shortage.

It also became known on Wednesday that starting from 18 April Ministry of Finance will begin to repurchase government bonds from the market in the amount of  Y160 billion.

As noted in the minutes of the meeting of the Bank of Japan of 14 March released yesterday, the earthquake of 11 March and subsequent devastating tsunami had a significant impact on the Japanese economy. Members of the Monetary Committee have agreed to continue soft policy and mitigate it further as soon as possible. The Bank of Japan expects deterioration in sentiments both within large companies, production and households. 
In addition the head of the regulator Mr. Shirakawa noted on Tuesday that Japanese economy had declined in exactly the same way as after the collapse of Lehman Brothers.

Statistics released on Monday showed that volume of orders for the basic production equipment in Japan reduced by 2.3% m/m in February for the first time in the last three months while a month earlier the index had increased by 4.2%. The indicator gives an idea about the amount of capital investments in production sector for the next 3-6 months. Thus, continuation of companies’ cost reduction threatens to the Japanese economy in addition to the fact that the situation in the business sector has already been very hard after the series of earthquakes and tsunamis.

Statistics released earlier was positive (unemployment rate amounted to 4.6% in February, unrevised; balance of current account increased by 3.0% y/y in February against the fall by 47.6% in January; level of import increased by 3.3% y/y, export rose by 4.1% y/y).

 

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