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JPY: Japanese Yen grows significantly in the New Year
TheJapanese Yen rate is traded upward at the Forex currency market.
Forex forecast: MACD indicator for the pair USD/JPY is inthe positive area and is descending, giving a sell signal. StochasticOscillator continues to weaken in the oversold zone and is maintaining asimilar signal.
Forex recommendations: in case of breakdown at the level of 76.50,the pair will go to 76.40 and 76.20. If downward breakdown does not take place,the pair will consolidate at the current levels.
The JPY is growing taking advantage of thetemporary decline in demand for the USD, while situation in the global marketsis quite neutral. State of affairs in Japan is also stable in terms ofmacro-economics.
We would remind that a meeting of the Bank ofJapan, which was held in December, was gloomy. Thus, the regulator noted thatgrowth of economic activity has slowed down and activity in Japanese economy iszero. The Bank has revised economic situation assessment downward in comparisonwith November, which is logical. Japanese economy will start to recover as soonas pressure from Europe diminishes.
Interest rate in the country was left unchangedat the level of 0.1%. This decision had been expected.
Minutes of the last meeting of the Bank ofJapan released earlier, states that it is necessary to trace back the effect ofthe recent soft policy; special concern is caused by the potential impact ofthe expensive Yen.
The head of the Bank of Japan Mr. Shirakawa noted earlierthat growth of the JPY continues to negatively impact on the local economy andthat current rise of the JPY was provoked by European crisis. He believes thatif appropriate measures are not taken straight away, economy of Japan willdecline sharply by 2030. Mr. Shirakawa also notedthat interventions against Yen are acceptable and effective. However, practicalsteps to support the words have not been made: apparently the Japaneseregulator is in the “fly-through mode” presently moreover, the Yendoes not give grounds for intervention due to its moderate activity.
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