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At the Forex currency market on Wednesday the Japanese Yen rate continues to grow on for the third consecutive day in response to the traders’ desire to hedge their risks and wait out with the help of the safe asset until the time of turbulence is over; which is naturally brings closer the time of new intervention of the Bank of Japan. However, there has not been any indications from regulator about it yet.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and goes up, giving a buy signal; volumes are decreasing. Stochastic Oscillator continues to go down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 76.70, the pair will go to 76.60 and 76.35. If downward breakdown does not take place, the pair will consolidate at the current levels. In addition, we would like to stress that the risk of currency intervention from the Bank of Japan is very high.

It became known today that revised industrial production increased by 0.4% m/m in July against preliminary level of +0.6% m/m. It is logical because the slump is taking place in all directions, due to the world- wide slowdown in economy.

At the meeting last week, the Bank of Japan decided to leave interest rate unchanged at 0.1% per annum. Changes in the monetary policy are not planned: program of buying assets and lending program will remain unchanged along with the exchange rate. In the follow-up comments the Central Bank noted that situation in Europe requires thorough attention and Japanese economy maintains the tendency to recover.

According to the previous estimates of the Bank of Japan, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%. Real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the Country of the Rising Sun said that next quarter Japan will demonstrate the rise of economy.

Statistics released earlier showed that real revised GDP in Japan fell by 0.5% q/q (-2.1% y/y) in Q2 against the forecast of -0.5% q/q (-2.0% y/y) and previous level of -0.3% q/q. Statistics released yesterday showed that bank lending fell by 0.5% in August against the decline of 0.6% in July. In addition, index of economical observers who monitor current situation fell to 47.3 points in August against the level of 52.6 points in July.

A meeting of G7 last weekend showed that member countries are concerned about the fate of Japan and large countries are willing to participate in consultations; however joint actions are not yet expected.

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