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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 is being corrected after the previous growth

The Japanese Yen rate is being corrected at the Forex currency market after a sharp rise this week on the surge of the demand from buyers, who tries to hedge their risks.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it starts to descend, giving a pair sell signal. Stochastic Oscillator starts to come out of the oversold zone and is giving a pair buy signal. 

Forex recommendations: in case of breakdown at the level of 82.20 buyers’ targets will be the levels of 82.50 and 82.75/80.

Deflation in Japan continues to retreat – the data on CPI in January, released today, showed reduction in the rate by 0.2% y/y after the decline by 0.4% y/y in December and the forecast of -0.3%. Food and energy resources begun to rise in price in the Country of the Rising Sun – and these are the main factors of inhibition of deflationary loop.

The data released on Wednesday showed that deficit of trade balance in January amounted to Y471.4 billion against expected level of +Y37.1 billion; although it can be only a seasonal factor. The level of import prices increased by 1.4% y/y in January against expectations of the rise by 7.4%; the level of import increased by 12.4% y/y (forecast: +8.1% y/y). In addition, the deputy head of the Bank of Japan Mr. Yamaguchi stressed this morning that now high rate of national currency neutralizes the factor of high import prices. In addition, he also drew attention to the fact that there is no need to revise forecasts for economic growth with the account of high oil prices.

The data published earlier demonstrated that index of activity in all sectors of Japan continued to decline in December: by 0.2% m/m against similar reduction level in November. At the same time experts of Nomura Bank reported last week that the worst stage is over for the economy of the Country of the Rising Sun and the process of economic recovery will accelerate. It agrees with the assessment of the Bank of Japan which emphasized that Japanese economy is strong enough now to cope with consequences of temporary recession. That seems to be an interesting resonance.

In addition the data released earlier showed that revised index of leading indicators in Japan increased by 0.8% in December; while index of coincident indicators was revised to+1.1%. As macro-data showed earlier, actual GDP declined by 0.3% q/q (forecast-2.0% y/y) in QIV, 2010; index of capital expenditures increased by 0.9% q/q in QIV against +1.5% in QIII. Therefore, the main publication earlier this week- Japanese GDP was above forecasts, however this effect can be temporary, since the economy of the country is still in the complex situation.

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