Forex Blog
Blog-FX.Com

At the Forex currency market the Japanese Yen rate is stable at the end of the week, there is almost no activity in the pair, as new drivers in the market did not turn up; Central Bank did not take actions either.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it started to go down and is giving a sell signal. Stochastic Oscillator has come into the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 76.10, the pair will go to ? 76.05 and 75.80. Consolidation near the current levels is possible, as well as correction.

Another round of strengthening in JPY will cause a flow of comments from monetary authorities of the country. This is probably the factor that restrains activity of the players in the pair USD/JPY. Today, monetary politician Mr. Azumi stressed that if the need be, the Bank of Japan will take decisive and timely measures. Apparently, the time for this has not come yet. Players have heard these comments since the last unilateral intervention, which was not successful; however it seems unlikely that infusions to Japanese market can become attractive for Europe and USA.

At the same time, we cannot disregard thefact that, trade deficit has been recorded in Japan for the first time in 30years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32billion (2.49 trillion yen). It seems that Japanese economy has been deprived of one of the main supportive tools - its exports. Currently, economic stimulus programs for the total amount of 20 trillion yen, are being implemented in Japan. They were designed to increase demand and finalize work to eliminate e aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

It became known this week that unemployment rate in Japan rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed decreased by 100 thousand against the growth of 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country. Wages in Japan continue to decline; the data in December showed decline of 0.2% y/y, the same as in November. Therefore, Japanese wages have been declining for 8 months out of 12. Some other positive data was more positive - preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

Tags: