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At the Forex currency market the Japanese Yen rate continues to be traded with slow progress, amid increasing indications of the possible intervention of the Bank of Japan.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shaping a sell signal; volumes are high. Stochastic Oscillator goes up in the neutral zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 77.40, the pair will go to 77.70 and 78.05. However, if upward breakthrough does not take place, the pair might drop to 76.80.

According to CitiFX estimates, the pair USD/JPY will go below the lows of March at 76.25, intervention in the currency trading by the Bank of Japan cannot be avoided and can cost Japanese regulator about $38-40 billion.

We would remind that the meeting of the regulator will start on Thursday and the levels at which the Bank of Japan will interfere in the trading process will be specified there.

At the last meeting, the Bank of Japan decided to leave interest rate unchanged in the target range of 0-0.1% per annum, as expected.

Lending program was also left unchanged in the amount of 30 trillion yen. According to the Bank estimates, 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%.

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 last month against the forecast of decline by 4.1% y/y; imports rose by 9.8% y/y, while expected growth had been 11.0% y/y.

In addition, preliminary average wages in Japan fell by 0.8% y/y in June against the forecast of growth by 0.5% y/y.

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