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The Japanese Yen rate has re-tested the highs of March at the Forex currency market on Wednesday, reaching the level of 78.49.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, giving a sell signal. Stochastic Oscillator started to go up in the neutral zone pushing away from oversold zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 79.65, the pair wil go79.80 and 80.15. If upward breakdown does not take place, the pair will go to 78.80.

As it became known today capacity utilization in Japan increased by 12.8% y/y in May against the decline of 1.1% in April. In addition, revised volume of industrial output in Japan rose by 6.2% m/m in May against preliminary value of +5.7%.

It became known today that consumer confidence index in Japan rose to 35.3 points in June against the level of 34.2 points in May. It is a good sign, showing that economy in the Country of the Rising Sun continues its slow but sure recovery. Statistics released earlier showed that bank lending in Japan decreased by 0.6% y/y in June against the forecast of -0.5% y/y.

In addition, orders in the machine-building industry of Japan rose by 3.0% m/m in May against the fall of 3.3% in April. According to the Cabinet “orders are recovering, however some sectors are lagging behind”. The indicator is usually considered as a leading index of corporate capital expenditures.

At the meeting of the Bank of Japan today, it was decided to leave interest rate unchanged in the target range of 0-0.1% per annum as expected.

Lending program was also left unchanged in the volume of 30 trillion yen. According to the Bank estimates, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast. Next year CPI is predicted to be at the level of +0.7%.

Note: that starting from this June, the Bank of Japan is going to raise its estimate for economic growth in the country, as the growth in the production volumes has triggered revival of exports, and, at the same time, private demand is also growing.

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