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At the Forex currency market the Japanese Yen rate is traded upward on Monday morning, while the Bank of Japan keeps its eagle eye on the developments in the pair USD/JPY, regardless of this, last Friday, the Yen managed to reach highs of March once again. 

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is doing the same in the neutral zone; however it started to go up and is shaping a buy signal.

Forex recommendations: off the market. Feasible event scenario at Forex: in case of breakdown at the level of 76.70, the pair will go to 76.90 and 77.50.

If   upward breakdown does not take place the pair will consolidate close to the current levels.It seems that Japanese authorities may lack strength and capabilities to “pacify” the JPY. Last Friday the currency had reached the highs of March once again; just a few weeks after the regulator has poured about 5 trillion yen into the market during currency intervention.

Now the Yen is only affected by market preference which is obviously in favor of the safe currency.  Representative of the monetary authorities of Japan, Mr. Noda said this morning that government is elaborating solution for the problem of expensive Yen and it is possible that the third edition of the emergency budget will contain measures which will support economy that suffers from impact of expensive YPY.

According to the politician, close cooperation of the Big Seven and of Big 20 can contribute to full reversal of the ascending channel of the JPY.Monetary politician regards the fall in Q2 as a temporary phenomena; he said that it is required to monitor risks, caused by expensive Yen. In addition, it is not possible to resolve the issue of deflation immediately and prices in the country will recover gradually.

Statistics released earlier was mixed: unemployment rate in June was at the level of 4.6%; household spending fell by 4.2% y/y in June; net national CPI increased by 0.4% in June against the forecast of +0.5%. Exports in Japan decreased by 1.6% y/y in June against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been of 11.0% y/y.

According to the previous estimates of the Bank of Japan, 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%. Real GDP in Japan decreased by 0.2% on quarterly basis (-1.3% y/y) in Q2. GDP fell less than expected, and Minister of Finance of the country of the rising sun said that Japan will demonstrate the rise of economy next quarter.

It became known earlier that leading indicators index in Japan was left unrevised, showing growth by 3.8 points against the rise of 3.4 points in May. At the same time, coincident indicators index in Japan increased by 2.7 points in June against the growth of 2.6 points in May. The data released earlier showed that composite index of consumer confidence in Japan increased to 37.0 points in July against the value of 35.3 points in June. It also became known that current account surplus in Japan was -50.2% y/y in June, Y526.9 billion against decline of 51.7% y/y in May.

It became known also that revised volume of industrial output in Japan increased by 3.8% m/m in June against preliminary value of +3.9% m/m. 

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