JPY: Yen regains its previous status of safe harbor; signals however are mixed

The Japanese Yen rate continues to grow gradually at the Forex currency market on Wednesday which is still difficult to identify as trend reversal; however it is obvious that amid global instability the Yan is again in demand as a safe harbor. 

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and it goes down which gives a pair sell signal. Stochastic Oscillator is giving a pair buy 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 83.30 the pair will go to 83.50 and 83.95. If the level of 82.80 is exceeded, traders’ targets will be the levels of 82.50 and 82.10.

Markets in Japan were closed yesterday due to the holiday in the country.

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.

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.

Noda also expressed hope that consumer prices in Japan will begin to grow in the new fiscal year which starts in April 2012. In general, the situation in Japanese economy remains unchanged, since attention of the monetary authorities is focused on the anti-deflation move and on the support to economy.

 

[More]