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At the Forex currency market the Japanese Yen rate continues to gain strength on Thursday after yesterday’s pullback. Investors’ risk aversion contributes to the strengthening of the Yen to a large extent.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and it goes down, being ready to cross signal line from top to bottom and giving a pair sell signal. Stochastic Oscillator has come out of the oversold zone today and started to rise; indicating that purchases in the pair is possible.

Forex recommendations: in case of breakdown at the level of 81.50 the pair will go to 81.40. If breakdown does not take place, the pair will consolidate close to the current levels.

It became known today that the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. In addition the following Japanese data was also released:
– Preliminary level of industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February;
– Unemployment rate remained at the previous level of 4.6% in March;
– Household spending fell by 8.5% y/y in March against the previous decrease by 0.2%;
– Net CPI declined by 0.1% y/y in March which became the 25th fact of reduction in a row.

In addition the Bank of Japan declared that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.
It became known at the beginning of the week, that the head of the Bank of Japan Mr. Shirakawa said that following the results in quarters I and II,  it can be expected that level of GDP will decline, due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Japan also considers the possibility of raising taxes to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

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