JPY: Japanese Yen started to rebound from local highs

The Japanese Yen rate is traded upward at the Forex currency market – after the intervention in the amount of 5 trillion yen, carried out by the Bank of Japan yesterday, the rate of the JPY had risen above 80.0 for the first time in a long time and is being corrected now.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shifting into the sideways and not giving a clear signal. Stochastic Oscillator goes up in the neutral zone, not as rapidly as before, shifting into the sideways and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 78.50, the pair will go to 78.30 and 78.10.

If downward breakdown does not take place, the pair will aim to 80.05.It became known today that 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.We would remind that At the meeting of the Bank of Japan today, interest rate was left unchanged, in the range of 0-0.1%, at the same time program of assets purchase has been increased up to 15 trillion yen (previously: 10 trillion yen).

In addition, volume of purchases of the long term government bonds was raised to 4 trillion yen (2 trillion yen earlier); size of program to purchase corporate bonds was increased to 2.9 trillion yen (2 trillion yen earlier). Economic evaluation of the Central Bank was raised again in July, because regulator believes that activity in the economy is growing fast, so economy of Japan is on the way to gradual recovery.

Meanwhile, this morning the Central Bank of Japan had carried out currency intervention to reduce pressure which Yen exerts on the economy. The volume of the intervention amounted to 5 trillion yen and the Yen had soared up above 80.0, for the first time since July. According to the previous estimates of the Bank, 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%.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 last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.In addition, preliminary average wages in Japan fell by 0.8% y/y in June against the forecast of growth by 0.5% y/y.  

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