JPY: Japanese Yen steps back at the end of the week

The Japanese Yen rate is traded downward at the Forex currency market, since Japanese statistics was very favourable.

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: in case of breakdown at the level of 80.60, the pair will go to 80.90 and 81.10. However, if upward breakdown does not take place, the pair will consolidate at the achieved levels.

The following Japanese data was released today:
– Net CPI level increased to +0.65% y/y in May against the level of +0.6% in April;
– Unemployment rate in Japan decreased to 4.5% in May against the level of 4.7% in April;
– Real expenditures of the households amounted to -1.9% y/y  in May against the level of -3.0% in April.

Therefore, recovery of the Japanese economy helps to improve employment situation of population.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.

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 the 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%.

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.

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