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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 gives way to USD, following rapid growth previously

At the Forex currency market the Japanese Yen rate is being corrected on Monday, after reaching local highs at the end of last week. The JPY has been consistently strengthening for 4 sessions, amid investors’ confidence that the world economy will carry on recovering, which reduced demand for USD as a security asset.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to decline, confirming a previous sell signal for the pair. Stochastic oscillator is still in the oversold zone not giving a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.20 the pair will go to the local low of 80.90 and below. If the level of 81.55 is broken down the pair will move to 81.80.

Worth noting that this morning the pair has reached the level of 80.93, which became the lows of many weeks. recall that the low of the 31 October 2010 was the level of 80.29. Such movement of the Yen attracts attention of the Bank of Japan to the currency market which increases the possibility of intervention or any other interference in the course of trading.

The situation in the economy of Japan remains unchanged in general. Unemployment in the country in November: (5.1% against 5.1% in October; change in employment rate in November: 80 thousand y/y) has remained in the previous level as expected.

Worth noting fact is that although deflation started it retreat its effect is still quite strong. The levels of industrial output showed positive rise for the first time over a few months which can became an indication of the recovery in the sector, which will lead to the recovery of the entire Japanese economy.

At the meeting which was held this week, the Bank of Japan announced the decision to leave interest rate unchanged in the target range of 0-0.1% per annum. The vote was unanimous. In the follow-up comments the regulator emphasized that assessment of economic situation remained unchanged and economic growth will be slow and small for some time. Nevertheless, Japanese economy continues to demonstrate signs of moderate recovery. In addition, the Bank of Japan lowered its forecasts for industrial output and drew attention to the need to keep track of the downward risks to the national economy.

The next meeting of the Bank of Japan is scheduled for 26 January. Subsequent meeting of the Regulator will be held on 18 February, 16 March, 8 aApril, 23 May, 15 June, 16 August, 15 September, 14 October, 14 November, 13 December.