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The Japanese Yen rate continuesto decline at the Forex currency market on Thursday morning.

Forex forecast: MACD indicatorfor the pair USD/JPY is in the negative area and is going up slightly, giving aweak buy signal. Stochastic Oscillator reversed in the neutral zone, pushingaway from the oversold zone and started to increase, giving a buy signal.

Forex recommendations: incase of breakdown at the level of 80.50, the pair will go to 80.60and 80.75. If upward breakdown does not take place, the pair will movetowards 80.00.

Meanwhile, economic situationin Japan has not changed much today.

Statistics remain mixed. Preliminaryvolume of retail sales in Japan reduced by 4.8% y/y in April againstexpectations of fall to -6.0% y/y; in addition, net CPI in Japan rose by 0.1%y/y in May against the increase of 0.2% in April. Japan has confronted with therise in inflation for the first time over 28 months, which is crucial for theeconomy; however, it requires confirmation over the next few months. Japanese consumerprices grew by 0.6% y/y excluding food, and prices for utilities and foodskyrocketed.

It is worth noting that tradebalance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) againstthe surplus a year earlier. It became known earlier that revised real GDP inJapan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of-0.8%. This data only confirms the view that Japanese economy is weak –GDP fell lower than expected, although the forecast had been quite pessimistic.According to the data released earlier trade balance deficit in May (first 20days) rose to Y1.053 trillion against the level of Y465 billion in April. Italso became known that exports volume for the first 20 days in May totaled -9.3% y/y versus the fall of -12.4% in April.

Representatives of Japanesegovernment said earlier that Japan is ready to cooperate with its Europeancounterparts in order to resolve Greek problems more effectively.

Finance Minister of Japan Mr.Noda, who has not been in public for quite a long time, said that authoritiescontinue to closely monitor currency market; and they remain confident thatcurrency rates should reflect macro-economic foundation. In the event that motionwill be chaotic in nature, Finance Ministry intends to take drastic measures. Thehead of the Bank of Japan Mr. Shirakawa said in the middle of the week thateconomy of the country is still under severe pressure and its recovery isexpected in the second half of the fiscal year. According to him shortage insupply is decreasing faster than expected; however excessive focus on the levelof business activity can lead to risks.

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