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JPY: Japanese Yen is still under pressure
At the Forex currency market the Japanese Yen rate continues to give way to the USD.
Forex forecast: MACD indicator for the pair USD/JPY moves sideways in the negative area; volumes are average, which all together, does not give a clear signal. Stochastic Oscillator is going up in the neutral zone, shaping a buy signal.
Forex recommendations: in case of breakdown at the level of 77.10, the pair will go to 77.30 and 77.40. A chance that the pair will consolidate at the current levels is high.
Volumes in the pair were not big at the Asian session.
Market is waiting for the end of the meeting of the Bank of Japan. Most likely, it will not bring any surprises and the rate will be maintained at its minimal level. On Tuesday, 24 January, Japanese government is planning to release updated forecast for national budget and its problems. Edition of Nikkei said last Friday that budget deficit in Japan will be above 17 trillion yen in 2015, which is 3.5% of GDP of the country even if government raises tax on consumption. Officially Japan plans to reduce bud get deficit to 3.2% of GDP in 2015 in order to reduce the index twice versus to 2010.
The head of the Bank of Japan Mr. Shirakawa said last week that economic recovery in the Country of the Rising Sun has suspended and situation in Europe represents the most dangerous risk for the economy. Local companies have no problems with credits currently; however the situation can become more complicated due to external influence.
It is also worth noting, that according to the Bank of Japan, 7 out of 9 regions of the country downgraded assessments of economic situation versus the value in October. Only in two regions assessments remained unchanged. Nevertheless, Japanese statistics demonstrates deceleration in economy: revised average wages in the country fell by 0.2% y/y in November against preliminary decline of 0.1%. The index was stable in October, so it is the first decline in two months. In addition, bank lending rose by 0.5% y/y in December against the growth of 0.2% y/y in November.
