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At the Forex currency market the Japanese Yen rate continues to lose positions today under pressure from the USD and decline in demand for "safe" currency" amid general surge of positive sentiment.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it is shifting into sideways movement and is not giving a clear signal. Stochastic Oscillator goes up in the overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 77.30, the pair will go to 77.35 and 77.50. Consolidation near the current levels is not excluded.

The head of the Bank of Japan Mr. Shirakawa said yesterday that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy.

Market has heard such allegations for several months already; however the Yen steps back for neither monetary nor natural reason. Investors have lost interest in currencies which are "safe" harbours and appetite to risk is visible to unaided eye.

Meanwhile, domestic situation in the Country of the Rising Sun is complex. The fact that cannot be disregarded is that trade deficit has been recorded in Japan for the first time in 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8%y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen). It seems that Japanese economy has been deprived of one of the main supportive tools - its exports. It seems that political vacuum has been created in Japan; the head of the Bank of Japan Mr. Shirakawa noted this morning that master politicians are required to fight effectively against both expensive Yen and deflation.

Currently, economic stimulus programs for the total amount of 20 trillion yen are being implemented in Japan. They were designed to increase demand and finalize work to eliminate aftermaths of tsunami and earthquake in March. These funds shall also revive employment sector.

According to Japanese statistics released this week, bank lending rose by 0.7% y/y in January against the forecast of+0.5% y/y; current account balance amounted to Y303.5 billion in December against expectations of Y340.1 billion. Unemployment rate rose to 4.6% in December against the level of 4.5% in November. At the same time, the level of unemployed fell by 100 thousand against 80 thousand a month earlier. Nevertheless, this data has not radically affected general trend. Labour sector has been strongly affected by the overall economic slump in the country. Wages in Japan continue to decline; the data in December showed decline of 0.2%y/y, the same as in November. Therefore, Japanese wages have been declining for8 months out of 12. Some other positive data was more positive - preliminary volumes of industrial output rose by 4.0% m/m in December against expectations of growth of 2.7%.

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