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At the Forex currency market in the middle of the week, it looks like Japanese Yen rate is planning to stop decline, and tends to start reversal amid the change in the market sentiments.

Forex forecast: MACD indicator for the pair USD/JPY is in the negative area, however it is moving along the signal line and is not giving a clear signal. Stochastic Oscillator is growing sluggishly in the neutral zone, giving a moderate buy signal.Forex recommendations: in case of breakdown at the level of 81.20 the pair will go to 81.00 and 80.85. If downward breakdown does not take place, the pair will consolidate in the current range.
It became known this morning that tertiary index of business activity in Japan fell by 6.0% m/m (-2.9% y/y) in March. The fall was above the forecast and has become the fifth fact of decline on monthly basis over the last 12 months.

As it was made public earlier consumer confidence fell to 33.1 points in April against the level of 38.6 points in March, at the same time index of CGPI rose by 0.9% ?/? in April against the growth by 0.6% m/m in March. According to the data released earlier, current account balance in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released earlier showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

Representatives of the Central Bank of Japan stated today that the fall in sentiments can “disarm” the Central Bank. In addition the head of the regulator Mr. Shirakawa noted that economy is in the dire state after the earthquake.

It is also worth noting that according to the Bank of Japan real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.
The minutes of the Bank of Japan meeting of 6-7 April has been released earlier; it states that some members of the CB believe that the policy of quantitative easing in March had a positive impact on the state of the financial market and business confidence; however it is still required to monitor carefully the effect of the high prices for commodity. In addition, the Bank of Japan is concerned about the effects of the interest rates rise by the European Central Bank. In regards to the YPY rate, the document indicates that weak Yen positively affects the state of the capital expenditures. It should be taken into consideration that the meeting took place at the beginning of April when the YPY was really weak.  

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