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The Japanese Yen rate continues weakening for the tenth consecutive session at the Forex currency market on Wednesday, showing only a slight technical correction, the pair USD/JPY is strengthening.

Forex forecast: MACD indicator is in the positive area for the pair USD/JPY and is going upward having crossed the signal line bottom-up the day before. Stochastic Oscillator stays in the overbought zone today, maintaining a buy signal.

Forex recommendations: in case of breakup at the level of 84.50 the pair will go to 84.60 and 84.80.

As it became known on today, Coincident indicator in Japan grew by 0.4% m/m to the level of 106.3 points in February against the increase by 2.4% m/m in January. Leading indicator grew by 2.7% m/m to the level of 104.2 points against the increase by 2.4% m/m in January.

Meanwhile BOJ meeting started today, at the end of which central bank is expected to keep its target rate unchanged at 0.1% per annum (the level remains intact from December 2008) and accept a new plan of extra financing.

Besides markets are awaiting the regulator to announce offering a credit program for financial companies amounting to $12 bln at 0.1% per annum.
All central bank’s movements now aim at stabilization lending for companies to be able to use cheap money in the wake of magnitude-9 earthquake.
Part of the above mentioned measures was taken by BOJ after the quake of 1995, but in smaller volume terms.

According to observers, monetary policy tightening should not be expected until mid-2012, and stimulus programs will not be cut down for the nearest 6 months at least.

Revised data on Tankan survey was released the day before – as it became known, business confidence of all major companies in Japan after the earthquake on March, 11, increased by 6 points against the increase by 5 points in December. Besides the forecast for June turned out to be at the level of -2 points after the earthquake and tsunami. Before the acts of God the forecast was at +3 points.

Currently it is obvious that aftermath of the earthquake in March will impact on the economy – according to the estimates of the World Bank disasters in Japan in March will reduce GDP of the country in the middle of this year by 0.25%-0.5%; however it is possible that rapid economic growth will follow after that.

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