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JPY: Japanese Yen weakens with every passing day
The Japanese Yen rate is weakening at the Forex currency market for the fifth consecutive session – market ignores strong statistics according to which Japanese economy showed signs of recovery before the earthquake on March, 11, that ruined the game.
Forex forecast: MACD indicator is in the negative area for the pair USD/JPY, going upward, giving a pair buy signal. Stochastic Oscillator is in the overbought zone today, also giving a pair buy signal.
Forex recommendations: buyers’ targets for today will be the levels of 83.00 and 83.40.
Thus the statistics released this week showed signs of economic recovery in Japan before the earthquake: the level of Industrial output increased by 0.4% m/m (+1.3% y/y) in February that is a positive signal.
Tuesday’s data also turned out to be strong (unemployment rate decreased to the level of 4.5% in February against the level of 4.9% in January; the level of retail sales rose by 0.1% y/y in February against the same increase in January), but these are indicators for February – outdated for now.
Meanwhile data for March is weak as expected: the level of Small Business Confidence decreased to 49.5 points in March against the level of 56.6 points seen in February.
Currently it is obvious that aftermath of the earthquake in March will impact on the economy – according to the estimates of the World Bank disasters in Japan in March will reduce GDP of the country in the middle of this year by 0.25%-0.5%; however it is possible that rapid economic growth will follow after that.
The day before representative of the Bank of Japan Mr. Miyao said the day before yesterday that the regulator shall carefully trace all risk factors for the process of Japanese economic recovery. In addition, time frame and volumes of reconstruction is not known yet which makes obscure further economic outlooks of the Country of the Rising Sun.
Apparently the Japanese Yen rate heads for weakening – in the medium term the pair USD/JPY has a good chance to overstep the level of 84,0.
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