Forex Blog
Blog-FX.Com

At the Forex currency market the Japanese Yen rate is traded slightly upward on Thursday in response to investors' interest in "safe harbours". However, general trend in the currency remains unchanged, JPY is still under pressure.

Forex forecast: MACD indicator for the pair USD/JPY is in the positive area and continues to move along the signal line, not giving a clear signal. Stochastic Oscillator is going up in the neutral zone and is giving a moderate buy signal.

Forex recommendations: in case of breakdown at the level of 78.15, the pair will go to 78.30 and 78.40. If upward breakdown does not take place, the pair will consolidate at the current levels.

Macro-economic background in Japan is stable.

Statistics released earlier was negative. Japanese statistics is negative today. Trade balance deficit amounted to Y684.7 billion in November against the forecast of -Y442.4 billion; at the same time exports decreased by 4.5% y/y in November, while imports increased by 11.4% y/y. It is getting more difficult for Japan to maintain economic growth rate, as both, significant weakness of the world economy and strong Yen complicates the process.

Yesterday's meeting of the Bank of Japan was gloomy. Thus, the regulator noted that growth of economic activity has slowed down and activity in Japanese economy is zero. The Bank has revised economic situation assessment downward in comparison with November, which is logical. Japanese economy will start to recover as soon as pressure from Europe diminishes.

In addition, interest rate in the country was left unchanged at the level of 0.1%. This decision had been expected.

The head of the Bank of Japan Mr. Shirakawa noted earlier that growth of the JPY continues to negatively impact on the local economy and that current rise of the JPY was provoked by European crisis. He believes that if appropriate measures are not taken straight away, economy of Japan will decline sharply by 2030. Mr. Shirakawa also noted that interventions against Yen are acceptable and effective. However, practical steps to support the words have not been made: apparently the Japanese regulator is in the "fly-through mode" presently moreover, the Yen does not give grounds for intervention due to its moderate activity.

Finance Minister of Japan Mr. Azumi has noted yesterday that markets have trust in the USD. Declaration about intention of Japan to buy Chinese bonds was of interest. Azumi said that final decision has not been adopted yet and prospects of assets purchase should not be interpreted as a complete abandonment of dollar's investments. On the other hand it is quite clear that Japan takes preventive measures in the hope of protecting the country from risks in the future.

Tags: