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The Japanese Yen rate remains unchanged at the Forex currency market on Friday – it is still in the extremely narrow offset channel, not moving in either directions.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to go down, confirming a pair sell signal. Stochastic oscillator remains in the overbought zone, descending gradually.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 81.00 the pair will go to 81.20 and 81.50. If the level of 80.60 is exceeded, traders’ targets will become the levels of 80.40 and 80.30/15.

As statistics released today showed net CPI in Japan declined by 0.3% y/y in February against the level of -0.2% y/y in January. Therefore, Japan is still in the state of inflation.

Representative of the Bank of Japan Mr. Miyao said the day before yesterday that the regulator shall carefully trace all risk factors for the process of Japanese economic recovery. In addition, time frame and volumes of reconstruction is not known yet which makes obscure further economic outlooks of the Country of the Rising Sun.

However, 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.

We would remind that earlier Japan with the help of Central Banks of B7 countries conducted currency intervention, which discarded the Yen from local highs. As noted by the representative of the Bank of Japan Noda, countries of B7 conducted intervention, using the pair Euro/Yan. Currency intervention was not aimed at certain levels.

Market believes that regulator will have to carry out cash infusion not once to maintain the effect of the intervention- a one-time intervention is unlikely to be effective for the JPY. And offset of the pair USD/JPY in the last few days is a striking proof of that.

Note that offset movement in the pair USD/JPY can be maintained in the nearest future.

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