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The Japanese Yen rate is growing again at the Forex currency market on Wednesday – the JPY did not demonstrate definite dynamics over last week, changing direction of movement every day, remaining within wide price range of 80.25-81.30.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however is going upward slightly and is shaping a buy signal. Stochastic Oscillator is going up in the neutral zone and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 80.90, the pair will go to 81.10 and 81.25.

If the pair happens to be weak, the target for the pair will be the level of 80.50.It became known today that preliminary index of leading indicators in Japan rose by +2.4% m/m in May while the forecast had been +2.5%.

At the same time preliminary index of leading indicators in may rose by 3.6 points versus the reduction of 3.4 points in April. Indicator of delayed indices rose to 91.5 points (+0.7 points) in May. Based on statistics, authorities of Japan indicate that national economic situation has improved.

The data released last week showed that real expenditures of the households amounted to -1.9% y/y in May against the level of -3.0% in April. Net CPI level increased to +0.65% y/y in May against the level of +0.6% in April.

Index Tankan was also presented towards the end; it showed that both, Japanese large and small companies have equally pessimistic view on the current situation however they believe in prospects and intend to work hard.The head of the Bank of Japan Mr. Shirakawa said at the beginning of the week  that economic growth of the Country of the Rising Sun has faced powerful downward pressure. Nevertheless 7 out of 9 regions of the country have revised their economic forecast upward.

It is worth noting that trade balance deficit amounted to Y853.7 billion (forecast –Y710.1 billion) against the surplus a year earlier. It became known earlier that revised real GDP in Japan fell by 0.9% on quarterly basis (-3.5% y/y) in Q1 against the forecast of -0.8%. This data only confirms the view that Japanese economy is weak – GDP fell lower than expected, although the forecast had been quite pessimistic.

According to the data released earlier trade balance deficit in May (first 20 days) rose to Y1.053 trillion against the level of Y465 billion in April. It also became known that exports volume for the first 20 days in May totaled - 9.3% y/y versus the fall of -12.4% in April.It became known in the middle of the week that preliminary volume of industrial output in Japan rose by 5.7% m/m (-5.9% y/y) in May.

The data is above the forecast (5.5%). Recall, that in March when severe earthquake and tsunami hit the country industrial output had collapsed to 15%.

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