JPY: Japanese Yen weakens in pairing with USD

At the Forex currency market the Japanese Yen rate continues to decline on Wednesday amid stable external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, however reversal is taking shape, starting a pair buy signal. Stochastic Oscillator continues to go up in the neutral zone today, confirming a previous buy signal for the pair.

Forex recommendations: in case of breakdown at the level of 83.00 the pair will go to 83.50 and 84.00.

According to the head of the Bank of Japan Mr. Shirakawa, excessive load on the short term inflation can harm price stability in the country: price stability itself is not the foundation of the economic stability; therefore Japan still requires accommodative monetary policy. Shirakawa also thinks that inflation of new bubbles shall be avoided.  

The data released yesterday showed decline in bank lending in February (- 2.0% y/y  against -1.9% y/y in January; and the fall in current account balance in January: (-47.6% y/y (Y461.9 billion) against +30.5% in December).

Interest rate of the Bank of Japan is at its lowest level of 0.1% per annum. The next meeting of the Bank of Japan is scheduled for 16 March. (Other meetings of the regulator will be held on 16 March, 8 April, 23 May, 15 June, 16 July, 15 September, 14 October, 14 November, 13 December).

According to the Japanese observers the worsening political situation is a long term negative factor for the Japanese Yen; it especially concerns Prime-Minister of Japan, Naoto Khan. Khan’s positions had shattered after the resignation of the Minister of Foreign Affairs, Maekhara. First of all, in case of Khan’s resignation there will be difficulties in adopting the law of repayment of the considerable public debts of the Country of the Rising Sun. Khan brings forward a draft bill on the issue of government bonds. 

Chairman of the Bank of Japan Mr. Yagamuchi said earlier that country’ economy shows signs of recovery: amid the growth of the developing markets, Japan also receives a catalyst to get out of hibernation.

 

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