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The Japanese Yen rate is strengthening again reverted to growth at the Forex currency market on Friday. However the situation at the global capital markets remains volatile this morning which prevents from making far-reaching conclusions. 

Forex forecast: MACD indicator for the pair USD/JPY crossed the signal line from top to bottom, giving a pair sell signal. Stochastic oscillator started to decline in the neutral zone, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 80.50 the pair will go to 80.30 and 80.10.

As it became known today, current account balance in Japan fell by 34.3%, to Y1.679 trillion in March against expected -32.0%. The data released earlier showed that leading indicators index decreased by 4.5% and index of coincident indicator subsided by 3.2%. In addition it is also became known that gold and foreign currency reserves of Japan have reached a new peak level.

The minutes of the Bank of Japan meeting of 6-7 April has been released earlier; it states that some members of the CB believe that the policy of quantitative easing in March had a positive impact on the state of the financial market and business confidence; however it is still required to monitor carefully the effect of the high prices for commodity.  

In addition, the Bank of Japan is concerned about the effects of the interest rates rise by the European Central Bank.

In regards to the YPY rate, the document indicates that weak Yen positively affects the state of the capital expenditures. It should be taken into consideration that the meeting took place at the beginning of April when the YPY was really weak. 

Japan considers the possibility of raising taxes up to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Note that according to the Bank of Japan real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

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