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At the Forex currency market the Japanese Yen rate is traded downward on Friday, the pair USD/JPY is definitely under pressure from two different forces, which is why general trend has not been identified so far.

Forex forecast: MACD indicator for the pair USD/JPY is ready to break through the signal line from top to bottom and is giving a sell signal, while volume are minimal. Oscillator has intensified its growth in the neutral zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 77.50, the pair will go to 77.65 and 77.70.

The data released this morning showed that net national CPI in Japan declined by 0.1% y/y in October which agreed with the forecast.

The head of the Bank of Japan Mr. Shirakawa said at the end of the week that Japanese financial system remains stable and financial sector is not too vulnerable to the European crisis. Meanwhile, economic growth is Japan has slowed down as crisis in Eurozone affects the rate of the Yen and stock indexes.

Rating agency S&P said yesterday that Japanese rating is going to be revised soon, as financial situation in the country is deteriorating every day. According to the economists of the Agency it is hardly probable that Japan will be able to avoid debt problems.

Revised volume of industrial output in Japan amounted to -3.3% m/m (-3.3% y/y) in September against preliminary level of -4.0% m/m. In addition, preliminary real GDP in Japan rose by 1.5% q/q (+6.0% y/y) in Q3 against the forecast of growth by 5.9% y/y. Earlier, Association of Economic Planning of the Cabinet of Japan arose market’s interest in new macro statistics forecasts. Thus, as per their estimates, real GDP in Japan will rise by 0.24% in the fiscal year of 2011 against the forecast in October of  +0,22%. In 2012 fiscal year GDP will increase by 2.22% (+2.30% previously). Net CPI this year will amount to -0.12% (-0.15% forecast in October), and in 2013 net inflation will be +0.18%.

It became known earlier that index of coincident indicators in Japan was revised to -1.3 points in September against previous level of -1.4 points. At a two-day meeting last week, the Bank of Japan decided to keep interest rate at the previous level of 0.10% per annum. Previous volume of assets purchases was also left unchanged (20 trillion yen) as it has been revised only at the end of October.  It is not excluded that regulator will continue easing of the monetary policy if the Yen will rise in price especially knowing that after-war highs of the YPY have been tested much more than once. Japanese economy is still strongly dependant on the external demand, which is not very reliable at the moment. All these fosters Yen’s tendency to grow.

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