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JPY: Japanese Yen was thrown away from highs by intervention

The Japanese Yen rate is decreasing rapidly at the Forex currency market on Thursday morning – the Bank of Japan had carried out currency intervention to release pressure from the economy of the country caused by the expensive currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, shifting into the sideways   movement and not giving a clear signal. Stochastic Oscillator goes up in the neutral zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 79.50, the pair will go to 79.70 ? 78.05.

At the meeting of the Bank of Japan today, interest rate was left unchanged, in the range of 0-0.1%, at the same time program of assets purchase has been increased up to 15 trillion yen (previously: 10 trillion yen). In addition, volume of purchases of the long term government bonds was raised to 4 trillion yen (2 trillion yen earlier); size of program to purchase corporate bonds was increased to 2.9 trillion yen (2 trillion yen earlier). 

Economic evaluation of the Central Bank was raised again in July, because regulator believes that activity in the economy is growing fast, so economy of Japan is on the way to gradual recovery.

Meanwhile, this morning the Central Bank of Japan had carried out currency intervention to reduce pressure which Yen exerts on the economy.

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.

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%.


 

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