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JPY: Japanese Yen became weaker after the decision on the country’s ranking
The Japanese Yen rate is traded with significant decrease at the Forex currency market on Thursday, as soon as the information that Japan was downgraded to the level of AA- by the rating agency S$P became public, the currency weakened sharply.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to move along the signal line, not giving a signal. Stochastic oscillator is giving a pair buy signal, being in the neutral zone.
Forex recommendations: if current bullish sentiment will be maintained and in case of breakdown at the level of 82.70, the pair will go to 82.90 and 83.50.
Thus, rating agency S&P reported downgrade of Japan to the level of AA- which led to the massive sales of the JPY. Later, representatives of the agency Fitch stressed that Japan needs more stable financial policy than it is now.
It is interesting, that Japanese data released this morning was quite good: trade balance of the country increased to the level of Y727.7 billion (earlier +Y161.1 billion), exports rose by 13.0% y/y in December, while imports grew by 10.6% y/y.
In addition, country’ export to the U.S. increased by 16.5% y/y in December.
On Wednesday morning the Bank of Japan reported a revision of its economic forecast, emphasizing that the pause in the economic recovery, observed in QIV last year was a temporality, and the economy will be back on the path of recovery in the nearest months. The regulator believes that one of the main factor of support is an industrial production sector –its growth estimate was revised upward by the Bank of Japan in December and the regulator takes into account accumulation of capital by the companies, due to which investments flow into the sector will be stably moderate as yet.
Most likely the revision was premature; we should not forget about deflation and expensive Yen
A two-day meeting of the Bank of Japan finished the day before yesterday; at the meeting it was decided to keep interest rate in the previous target range of 0-0.1% per annum. The head of the Bank of Japan Mr. Shirakawa noted in the follow- up comments that the country continues to move towards achieving price stability and at the moment both upside and downside risks to the economy are stabilized. Monetary politician also stressed that Japan will resume recovery sooner or later; while the growth in QI 2011 still remains disputable. Shirakawa also expressed confidence that export levels will also begin to increase.
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