JPY: Japanese Yen stands still pending, and preserves downward trend

At the Forex currency market the Japanese Yen rate keeps a downward trend on Thursday morning, after the publication of the Japanese pessimistically tinged statistics.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, and started to grow, giving a pair buy signal. Stochastic Oscillator is growing in the neutral zone, giving a moderate buy signal.

Forex recommendations: in case of breakdown at the level of 81.70 the pair will go to 82.00 and 82.25. If upward breakdown does not take place, the pair will consolidate in the current range.

It became known today that preliminary GDP in Japan fell by 0.9% q/q (-3.7% y/y) in QI. In addition, revised volume of industrial production fell by 15.5% in March against preliminary -15.3%.

It is obvious that the earthquake in March had a negative impact on the industrial production.
It was not the last negative news- ex-deputy head of the Bank of Japan Mr. Muto said this morning that national economy is weak and will reach the bottom in QIII this year. Future economic prospects are vague.

Japanese Economy Minister is confident that the economy of the Country of the Rising Sun is very easy to adapt to various changes and prior to the earthquake the state of economy had improved. “We are making progress in the fight against limited supply and by the end of this fiscal year GDP will increase by 1%” –he said. The Minister is also assured that economy can avoid recession.

As it was made public earlier consumer confidence fell to 33.1 points in April against the level of 38.6 points in March, at the same time index of CGPI rose by 0.9% ?/? in April against the growth by 0.6% m/m in March. According to the data released earlier, current account balance in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released earlier showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

Note also that tertiary index of business activity in Japan fell by 6.0% m/m (-2.9% y/y) in March. The fall was more significant than expected and became the fifth fact of decline on monthly basis over the last 12 months.

Representatives of the Central Bank of Japan stated this week that the fall in sentiments can “disarm” the Central Bank. In addition the head of the regulator Mr. Shirakawa noted that economy is in the dire state after the earthquake.

It is also worth noting that according to the Bank of Japan real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

 
 

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