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The Japanese Yen rate is traded downward at the Forex currency market on Tuesday, since Japanese Yen is losing its status of a protective currency, reacting to the changes in the external background.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, slightly goes up, shaping a buy signal. Stochastic Oscillator is going up in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 81.15, the pair will go to 81.30 and 81.45.

The data released today showed that the impact of the March earthquake on the wages rate of Japan is getting weaker: average wages rose by 1.1% y/y in May against the decline of 1.4% in April.

It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier. It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%. This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic. According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April. It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.

It became known in the middle of the week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May. The data is above the forecast (5.5%). Recall, that in March when severe earthquake and tsunami hit the country industrial output had collapsed to 15%.

The data released last week showed that real expenditures of the households amounted to -1.9% y/y in May against the level of -3.0% in April. Net CPI level increased to +0.65% y/y in May against the level of +0.6% in April. Index Tankan was also presented towards the end; it showed that both, Japanese large and small companies have equally pessimistic view on the current situation however they believe in prospects and intend to work hard.

The head of the Bank of Japan Mr. Shirakawa said at the beginning of the week  that economic growth of the Country of the Rising Sun has faced powerful downward pressure. Nevertheless 7 out of 9 regions of the country have revised their economic forecast upward.

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