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• Rouble is losing positions again in pairing with USD and EUR [11/10/2011]
• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

JPY: Japanese Yen continues to grow steadily

At the Forex currency market the Japanese Yen rate continues to move in the ascending channel on Thursday due to the demand among traders, caused by the increasing geopolitical tension in the Middle East.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY, however it started to move along the signal line and is not giving a clear signal. Stochastic Oscillator has come out of the oversold zone and continues to give a pair sell signal.

Forex recommendations: if investors’ bearish sentiment is maintained, traders’ targets will be the levels of 81.75 and 81.30/25.

The data released on Wednesday showed that deficit of trade balance in January amounted to Y471.4 billion against expected level of +Y37.1 billion; although it can be only a seasonal factor. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y). In addition, the deputy head of the Bank of Japan Mr. Yamaguchi stressed this morning that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of high oil price.

The data published earlier demonstrated that index of activity in all sectors of Japan continued to decline in December: by 0.2% m/m against similar reduction level in November. At the same time experts of Nomura Bank reported last week that the worst stage is over for the economy of the Country of the Rising Sun and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession. That seems to be an interesting resonance.

In addition the data released earlier showed that revised index of leading indicators in Japan increased by 0.8% in December; while index of coincident indicators was revised to+1.1%. As macro-data showed earlier, actual GDP declined by 0.3% q/q (forecast-2.0% y/y) in QIV, 2010; index of capital expenditures increased by 0.9% q/q in QIV against +1.5% in QIII. Therefore, the main publication earlier this week- Japanese GDP was above forecasts, however this effect can be temporary, since the economy of the country is still in the complex situation.

It is interesting that the news announced by the rating agency Moody's Investors Service about downgrading forecast of Japanese rating, which is Aa2 now, from “stable” to “negative” because growing budget deficit in the country and the lack of effective political measures are the risk factors for the national economy, had been won back by the pair USD/JPY rather quickly. 

 

 

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