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On Thursday morning the Japanese Yen rate keeps on steady growth which started yesterday at the Forex currency market.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, slightly goes up, shaping a buy signal. Stochastic Oscillator is going down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 80.10, the pair will go to 79.90 and 79.70.

If downward breakdown does not take place, the pair will consolidate at the achieved levels.Statistics released today showed that number of begun construction in Japan increased by 6.4% y/y in May, while the forecast of growth had been by 3.3%. Construction sector in the Country of the Rising Sun is reviving and it is a positive sign.

In addition, orders in the construction sector of Japan increased by 25.5% y/y in May against the level of +31.4% y/y in April.It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier. It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%.

This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic. According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April. It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.Statistics remain mixed.

Preliminary volume of retail sales in Japan reduced by 4.8% y/y in April against expectations of fall to -6.0% y/y; in addition, net CPI in Japan rose by 0.1% y/y in May against the increase of 0.2% in April. Japan has confronted with the rise in inflation for the first time over 28 months, which is crucial for the economy; however, it requires confirmation over the next few months.

Japanese consumer prices grew by 0.6% y/y excluding food, and prices for utilities and food skyrocketed.The data released earlier showed that preliminary retail sales in Japan decreased by 1.3% y/y in May, against the forecast of reduction by -2.2% y/y. The data was better than expected which was caused by the effect of the Japanese economic recovery after the disaster of 11 March.

It became known in the middle of the week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May. The data is above the forecast (5.5%). Recall that in March, when severe earthquake and tsunami hit the country, industrial production collapsed by 15%. 

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