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At the Forex currency market the Japanese Yen rate is traded slightly upward on Friday.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and is moving slowly along the signal line, not giving a clear signal. Stochastic Oscillator has come out of the overbought zone and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 77.70, the pair will go to 77.50 and 77.20 If downward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background is stable in Japan this morning.

Statistics released today showed that business sentiment in Japan deteriorated: Study from Tankan indicates that index of large producers amounted to -4 points in Q4 against preliminary +2 points and the forecast of March has shifted to -5 points against previously predicted +4.  This is a negative signal for the prospects of Japanese economy.

Real GDP in Japan was revised downward to +1.4% q/q (+5.6% y/y) in Q3 against preliminary +1.5% q/q (+6.0% y/y). New block of statistics showed that surplus of current account in Japan amounted to Y562.4 billion in October, demonstrating a fall of 62.4% y/y. Morning statistics also showed that volume of credit outstanding in the country increased by 0.2% y/y last month. It indicates the increase in demand for corporate financing and can be perceived positively. Level of bank lending is also growing steadily (+0.2% y/y in November: +0.1% y/y in October; -0.3% y/y in September).

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the “fly-through mode” presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

The data released this week showed that consumer confidence index in Japan fell for the first time in 7 months in November (38.1 against 38.6 previously), as global economy significantly affects Japan and its expensive Yen as well.

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