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The Japanese Yen rate continues to rise at the Forex currency market on Tuesday; it is the third day today when the JPY is steady growing.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it started to move along the signal line and is not giving a clear signal. Stochastic Oscillator is going down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 80.00, the pair will go to 79.75.At the meeting of the Bank of Japan, which was held today it was decided to leave interest rate unchanged in the target range of 0-0.1% per annum as expected.Lending program was also left unchanged in the volume of 30 trillion yen.

According to the Bank estimates, real level of GDP will rise by 0.4% in the fiscal year of 2011 (forecast of April had been more optimistic: +0.6%). In the fiscal year of 2012, GDP growth is expected in the volume of 2.9% which would agree with the April forecast.

Next year CPI is predicted to be at the level of +0.7%.In addition, starting from this June, the Bank of Japan is going to raise its estimate for economic growth in the country, as the growth in the production volumes has triggered revival of exports, and, at the same time, private demand is also growing.  It became known today that consumer confidence index in Japan rose to 35.3 points in June against the level of 34.2 points in May.

It is a good sign, showing that economy in the Country of the Rising Sun continues its slow but sure recovery. Statistics released earlier showed that bank lending in Japan decreased by 0.6% y/y in June against the forecast of -0.5% y/y.In addition, orders in the machine-building industry of Japan rose by 3.0% m/m in May against the fall of 3.3% in April.

According to the Cabinet “orders are recovering, however some sectors are lagging behind”. The indicator is usually considered as a leading index of corporate capital expenditures.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.

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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