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The Japanese Yen rate continues to grow steadily at the Forex currency market, while investors are not very interested in the USD.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, and started to increase slightly, however today it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator is declining in the neutral zone and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 81.00 the pair will go to 80.80 adn 80.60. If downward breakdown does not take place, the pair will consolidate in the current range.

The following Japanese data was released today:

– Preliminary volume of retail sales in Japan reduced by 4.8% y/y in April against expectations of fall to -6.0% y/y;

– Net CPI in Japan rose by 0.1% y/y in May against the increase of 0.2% in April.

Thus, Japan confronted with the rise in inflation for the first time over 28 months, which is crucial for the economy; however, it requires confirmation over the next few months. Japanese consumer prices grew by 0.6% y/y excluding food, and prices for utilities and food skyrocketed.

It became known yesterday that index of prices for corporate services in Japan fell by 0.8% y/y in April against the level of -1.2% in March. The data is positive as it reflects ability of the local economy to recover and regenerate.

The data released this week showed that volume of imports increased by 8.9% y/y in April against the forecast of growth by 12.8% and the previous rise by 11.9%; volume of exports fell by 12.5% in April against the forecast of reduction by 12.7% and previous decline of 2.2%.

In addition, minutes of the Bank of Japan meeting of 28 April was released yesterday, which states that the Bank members were requested to expand program of the quantitative easing due to the deterioration in the economic sentiments. The Bank also agreed that it is required to focus on the downside economic risks and take further steps to support the process reconstruction after the earthquake.

Japanese Economy Minister is confident that the economy of the Country of the Rising Sun is very easy to adapt to various changes and prior to the earthquake the state of economy had improved. “We are making progress in the fight against limited supply and by the end of this fiscal year GDP will increase by 1%” –he said. The Minister is also assured that economy can avoid recession. Ex-deputy head of the Bank of Japan Mr. Muto said this morning that national economy is weak and will reach the bottom in QIII this year. Future economic prospects are vague.

Macro-economic statistics for March which is being released this week shows weakness of the economy; index of coincident indicators in Japan fell by 3.3% m/m in May against the preliminary estimate of 3.2%; index of leading indicators in Japan decreased by 3.9% m/m in March versus preliminary estimate of -4.5%.

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