JPY: the Japanese Yen remains firm

At the Forex currency market the Japanese Yen rate continues strengthening on Wednesday – during the week currency’s movements may be polar, but in whole the upper trend is visible.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and is moving along the signal line, not giving any clear signal. Stochastic Oscillator is moving downward in the neutral zone giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.10, the pair will go to 76.00 and 75.90. If breakdown does not take place, the pair will consolidate at the current levels.

As noted by the Head of BoJ Masaaki Shirakawa this morning, the regulator is making some serious steps towards JPY weakening buying assets. Still the national currency doesn’t notice any serious movements and enjoys demand among traders that are hedging risks. Let us remind that as it became known the day before, Japanese politicians would take a set of measures to weaken the national currency in the long term. Presumably, the measures would include using JPY in M&A and in securing electric payments. It also became known that currency intervention fund would 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.

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%.

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.