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JPY: Japanese Yen is gaining in strength again
At the Forex currency market the Japanese Yen rate reverted to growth again at the beginning of the week.
Forex forecast: MACD indicator for the pair USD/JPY continues to go down in the negative area, volumes are increasing, which, all together, gives a sell signal. Stochastic Oscillator is going sideways in the neutral zone and is not giving a clear signal.
Forex recommendations: in case of breakdown at the level of 76.80, the pair will go to 76.70 and 76.50. It is also possible that the pair will consolidate at the current levels.
The data released on Monday showed that composite index of consumer confidence in Japan increased to 38.9 points in December against the level of 38.1 points in November.
At the same time, the head of the Bank of Japan Mr. Shirakawa said today that economic recovery in the Country of the Rising Sun has suspended and situation in Europe presents the most dangerous risk for the economy. Local companies have no problems with credits in the current conditions; however the situation can become more complicated due to external influence.
It is worth noting that according to the Bank of Japan 7 out of 9 regions of the country downgraded assessments of the economic situation in comparison the state of affairs in October. In two regions assessment has remained stable.
Statistics released earlier showed that trade balance in Japan was at the level of -Y496.5 billion in December. In addition, bank lending increased by 0.5% y/y in December against the growth of 0.2% y/yin November. Minutes of the last meeting of the Bank of Japan released earlier, stated that it is necessary to trace back the effect of the recent soft policy; potential impact from the expensive Yen also causes special concern.
Mr. Shirakawa, the head of the Bank of Japan note dearlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective.
