JPY: Japanese Yen started this week with growth

At the Forex currency market the Japanese Yen rate is growing on Monday morning, staying nevertheless in the four-day range with the lower boarder of 80.25. The pair USD/JPY fails to exceed important level of 80.0 as yet.

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

Forex recommendations: off the market.Feasible event scenario at Forex: in case of breakdown at the level of 80.90, the pair will go to 81.10 and 81.30.

However, if upward breakdown does not take place, the pair will aim at 80.30.The head of the Bank of Japan Mr. Shirakawa said today that economic growth of the Country of the Rising Sun has faced powerful downward pressure. Nevertheless 7 out of 9 regions of the country have revised their economic forecast upward.

According to the data released last week real spending of households amounted to -1.9% y/y in May against the level of -3.0% in April; net CPI level increased to +0.65% y/y in May against the level of +0.6% in April. Index Tankan was also presented towards the end; it showed that both, Japanese large and small companies have equally pessimistic view on the current situation however they believe in prospects and intend to work hard.It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier.

It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%. This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic. According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April.

It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.The data released earlier showed that preliminary retail sales in Japan decreased by 1.3% y/y in May, against the forecast of reduction by -2.2% y/y. The data was better than expected which was caused by the effect of the Japanese economic recovery after the disaster of 11 March.

It became known in the middle of last week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May. The data is above the forecast (5.5%). Recall that in March, when severe earthquake and tsunami hit the country, industrial production collapsed by 15%.

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