JPY: Yen continues to consolidate in the previous range

The Japanese Yen rate goes up slightly at the Forex currency market today; however the currency has consolidated in the range of   82.90-83.70 since 17 November.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes up, giving a pair buy signal. Stochastic Oscillator has not identified a clear signal today, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 83.80 the pair will go to 84.10 and 84.50. If the level of 83.30 is exceeded, traders’ targets will be the levels of 83.00 and 82.80.

Representative of the Bank of Japan Mr. Nakamura noted on Thursday morning that high rate of the Yen has already left an imprint on the national economy and on the stock market volatility. In his view, growth of the JPY can trigger downward pressure on the level of domestic prices. According to the politician the pace of exports in Japan will remain slow and industrial indicators will be weak.

Nakamura reiterated that Central Bank will take measures in the economy if the need arises, however purchase of assets by the Bank of Japan is not aimed to stimulate the rise in demand for such securities. Japanese Finance Minister Mr. Noda stressed earlier that authorities intend to take decisive measures when required and if the Yen starts to grow rapidly. He also noted that the Bank of Japan shall provide full support to the country’s economy.

The Bank of Japan interest rate has been maintained in the target range of 0-0.1% per annum; at the last meeting the Bank of Japan  announced the purchase of the mortgage investment trusts with the rating not lower than AA. As was noted earlier in accordance with the Bank of Japan expectations, domestic economy will revert to the moderate growth path in 2011; while average forecast of basic inflation amounts to 0.4% so far. Average forecast of the real level of GDP for the next fiscal year is at the level of +2.1% against the forecast of 2.6% in June. The head of the Bank Mr. Chirakawa noted that they will carry out monetary policy easing more actively than it was before, as the economy follows the way of development.

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