JPY: Japanese Yen stuck in the range

At the Forex currency market the Japanese Yen rate remains in the quite narrow range of 80.15-81.33 at the beginning of the week. At the moments the interest of players in JPY has been observed, since it acts as a safe asset while external background is still tense.

Forex forecast: MACD indicator for the pair USD/JPY has crossed the signal line from top to bottom and is not giving a clear signal. Stochastic Oscillator started to go down in the neutral zone, giving a pair sell signal. 

Forex recommendations: in case of breakdown at the level of 80.70 the pair will go to 80.50 and 80.10. If downward breakdown does not take place the pair will consolidate in the current range.

The following Japanese data was released today:

– Consumer confidence fell to 33.1 points in April against the level of 38.6 points in March;
– Net orders in the machine building sector rose by 2.9% m/m in March against the revised level of -1.9% m/m in February;
– Index of CGPI rose by 0.9% ?/? in April against the growth by 0.6^ m/m in March.

However, the most essential factor for the Yen at the moment is the interest of investors who are shifting to safe assets under the pressure of the external environment.

The minutes of the Bank of Japan meeting of 6-7 April has been released earlier; it states that some members of the CB believe that the policy of quantitative easing in March had a positive impact on the state of the financial market and business confidence; however it is still required to monitor carefully the effect of the high prices for commodity. In addition, the Bank of Japan is concerned about the effects of the interest rates rise by the European Central Bank. In regards to the YPY rate, the document indicates that weak Yen positively affects the state of the capital expenditures. It should be taken into consideration that the meeting took place at the beginning of April when the YPY was really weak. 

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 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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