JPY: Yen makes attempts to recover

At the Forex currency market the Japanese Yen is traded with some uncertainty at the beginning of the new week, making sluggish attempts to recover despite the general positive external background.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it goes down giving grounds for a pair sell signal. Stochastic
Oscillator is giving a similar signal, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 83.00 the pair will go to 82.80 and 82.50. It breakdown will not take place the pair will consolidate close to the current levels.

Japanese Finance Minister Mr. Noda stressed this morning 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. Noda also expressed hope that consumer prices in Japan will begin to grow in the new fiscal year which starts in April 2012.

The Bank of Japan maintained interest rate 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.

The last Japanese statistics released last week was not too impressive (index of leading indicators was revised to -0.9 points in September against
the previous level of -0.6 points; index of coincident indicators was revised to -2.3 points m/m in September (previous level: -1.3). In addition activity index in the Japanese service sector reduced by 0.9% m/m in September against the previous level of -0.2% m/m. However the fall of the Yan this week at Forex gave local authorities a chance to focus their attention on the daunting problems in economy- in particular, on deflation.

[More]