JPY: Japanese Yen tends to correction again
At the Forex currency market the Japanese Yen rate tends to correction again this morning because investors are interested in the JPY as a safe currency due to the U.S. unstable budget situation.
Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is going up, giving a pair buy signal. Stochastic Oscillator went down in the oversold zone today and continues to give a sell signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 83.80 the pair will go to 84.00 and 84.20. If the pair exceeds the level of 83.45, correction will start at the level of 83.20.
It became known on Wednesday morning that starting from 18 April Ministry of Finance will begin to repurchase government bonds from the market in the amount of Y160 billion. Japanese Finance Minister Mr. Yosano noted yesterday that economic recession after the earthquake is temporary and by the end of the year the situation can improve in the Country of the Rising Sun. According to Yosano the main factor of uncertainty is instability of power supply and its possible shortage.
Statistics released this week showed that volume of orders for the basic production equipment in Japan reduced by 2.3% m/m in February for the first time in the last three months while a month earlier the index had increased by 4.2%. The indicator gives an idea about the amount of capital investments in production sector for the next 3-6 months. Thus, continuation of companies’ cost reduction threatens to the Japanese economy in addition to the fact that the situation in the business sector has already been very hard after the series of earthquakes and tsunamis.
Statistics released earlier was positive (unemployment rate amounted to 4.6% in February, unrevised; balance of current account increased by 3.0% y/y in February against the fall by 47.6% in January; level of import increased by 3.3% y/y, export rose by 4.1% y/y).
As noted in the minutes of the meeting of the Bank of Japan of 14 March released the day before yesterday, the earthquake of 11 March and subsequent devastating tsunami had a significant impact on the Japanese economy. Members of the Monetary Committee have agreed to continue soft policy and mitigate it further as soon as possible. The Bank of Japan expects deterioration in sentiments both within large companies, production and households.
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