JPY: Japanese Yen’s rate continues to remain far away from the highs

At the Forex currency market Japanese Yen’s rate has bounced slightly from its lows of November on Monday, although uneasy situation in Asia caused by the Korean conflict put pressure on the currency. 

Forex currency: MACD indicator is in the positive area for the pair USD/JPY, however it s moving along the signal line not giving a clear signal. Stochastic Oscillator is giving a pair sell signal, being in the overbought zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 84.20, the pair will go to 84.50 and 84.80. In case of breakdown at the level of 83.80, traders’ targets on Monday will become the levels of 83.50 ? 83.00.

The head of the Bank of Japan, Mr. Shirakawa said at the beginning of the week that growth in the Yen had both positive and negative sides.
Thus, strong Yen had an impact on the export levels, however it stabilized International trading situation in the medium terms as it also affected the reduction of the import prices.
Friday’s data demonstrated that deflation level began its recession in Japan. Thus, consumer prices continued to decline in October which became the twentieth consecutive reduction of the index although its pace has obviously slowed down.

Economists noted that deflationary spiral began to unwind following the introduction of high taxes on tobacco products in the country. CPI reduced by 0.6% y/y last month against the fall by 1.1% y/y in September. Nevertheless, Japanese economy will suffer from the consequences of deflation for a long time, which will result in slow pace of the GDP growth in the country and in the levels of exports too. Note, it is not clear yet whether this trend will consolidate or not.

The following Japanese news was released today:
– Retail sales level in Japan fell by 0.2% y/y in October against the growth by 1.4% in September;
– Level of confidence in small business in Japan decreased to the level of 45.8 in November against the previous level of 46.4.
The rates of the Bank of Japan have been maintained in the target level of 0-0.1% per annum. In addition at the last meeting the Bank of Japan announced the purchase of the mortgage investment trusts with the rating not lower than AA.

 

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