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At the Forex currency market the Japanese Yen rate is getting weaker again on Friday.

Forex forecast: MACD indicator for the pair USD/JPY has broken through the signal line from bottom to top and is going up, maintaining a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a similar signal.

Forex recommendations: in case of breakdown78.55, the pair will go to79.30 and 79.50. Consolidation near the current levels is not excluded.

Weakness of the Japanese Yen could be explained several reasons: first of all it is tranquility of the market about economic outlooks in the world while interest to safe currencies is decreasing and secondly, it is not excluded that the Bank of Japan injects liquidity in the market.

It has been the first time when trade deficit has been recorded in Japan in the last 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen).

The head of the Bank of Japan Mr. Shirakawa said earlier that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy.

At the meeting this week, the Bank of Japan left interest rate at the level of 0.1% per annum; however the Bank has made a step, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as the other one: program of purchases of long-term bonds was expanded to Y19 trillion from Y9 trillion. In addition, Central Bank surprised market again, by stating that according to the bank it will be reasonable to set inflation target at 1%, as economic forecasts are extremely hazy. It became continuation of reaction to statistics: GDP in Japan fell by2.3% y/y in Q4 2011, since European crisis and slowdown in the world economic rate prevented from recovery after natural disaster. Therefore, pressure on the Bank of Japan, which is planning to hold a meeting on Tuesday, is growing. New measures to support economy are expected from the regulator.

Reasons for decline in GDP in the Country of the Rising Sun are on the surface, they are: reduction in global consumption and aftermaths of earthquake and tsunami, as well as the flood in Thailand. However, it is quite possible that Japanese economy will rise by 1.4-1.6% this quarter and will be able to demonstrate growth of 1.7% at the end of this year.IMF gave similar estimates.

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