JPY: the Japanese Yen enjoys demand again

At the Forex currency market the Japanese Yen rate is resumed strengthening at the beginning of the week – apparently being influenced by the investors that look for some shelter in defensive currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, but starts rising ready to form a buy signal. Stochastic Oscillator starts moving downward in the neutral zone giving a weak sell signal.

Forex recommendations: in case of breakdown at the level of 76.60, the pair will go to 76.50 and 76.30. If breakdown does not take place, the pair will consolidate at the current levels.

Thus, two day’s correction gave place to another growth round.

Tankan survey released this morning showed that big manufacturing diffusion index totaled +2 points against the forecast of +3 points, big non-manufacturing diffusion index amounted to -11 points against the forecast of -14 points and -21 points seen previously.

A solid set of macroeconomic data was released at the end of the previous week: overall nationwide CPI totaled +0.2% y/y in August against the forecast of +0.1% y/y, Household spending totaled -4.1% y/y in August against the forecast of -2.8% y/y. Besides it became known that Unemployment Rate decreased to 4.3% in August against both the forecast and previous level of 4.7%.

It also became known that currency intervention fund will be increased by JPY15 k, and the Finance Ministry noted that it would continue to monitor all possible speculative movements at the Forex currency market and couldn’t exclude actions to be taken.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q.

As it became known the day before, Japanese politicians will take a set of measures to weaken the national currency in the long term. Presumably, the measures will include using JPY in M&A and in securing electric payments.

Still the JPY growth is determined by speculative capital.