JPY: Market’s sympathies are not with Japanese Yen

At the Forex currency market the Japanese Yenrate continues to be under moderate pressure.

Forex forecast: MACD indicator for the pairUSD/JPY is traded in the positive area and is going down, giving a sell signal;volumes are small. Oscillator is going up in the neutral zone and is giving astrong signal to buy.

Forex recommendations: in case ofbreakdown at the level of 77.10, the pair willgo to 77.2 5 and 77.40. If upward breakdowndoes not take place, the pair will consolidate at the current levels.

Presently, economic situation inJapan remains unchanged; demand for the YPY is low due to the mixed informationfrom the U.S. and Eurozone.

It became known earlier thatindex of coincident indicators in Japan was revised to -1.3 points in Septemberagainst previous level of -1.4 points.

At two-day meeting last week, theBank of Japan decided to keep interest rate at the previous level of 0.10% perannum. Previous volume of assets purchases was also left unchanged (20 trillionyen) as it has been revised only at the end of October. It is not excludedthat regulator will continue easing of the monetary policy if the Yen will risein price especially knowing that after-war highs of the YPY have been testedmuch more than once. Japanese economy is still strongly dependant on theexternal demand, which is not very reliable at the moment. All these fostersYen's tendency to grow.

According to the minutes of thelast meeting of the Bank of Japan, acquisition of two-year government bonds isan effective method of influence on the currency market; at the same time,state of affairs in Eurozone has its enormous affect as well. In addition,descending risks have increased for Japanese economy due to the growing Yen andcollapse of the stock markets.

Revised volume of industrialoutput in Japan amounted to -3.3% m/m (-3.3% y/y) in September againstpreliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan roseby 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y.Earlier, Association of Economic Planning of the Cabinet of Japan arosemarket's interest in new macro statistics forecasts. Thus, as per theirestimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011against the forecast in October of +0,22%. In 2012 fiscal year GDP willincrease by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12%(-0.15% forecast in October), and in 2013 net inflation will be +0.18%.