2012-02-15 11:34:00
At the Forex currency market on Wednesday the Japanese Yen rate remains under pressure from monetary authorities of the country and from the market which is not interested in safe currency.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY; it is going up and continues to give a buy signal. Stochastic Oscillator remains in the overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 78.50, the pair will go to 78.60 and 78.80. Consolidation near the current levels is not excluded.

Japanese Macro-economic background is quiet today; however the Yen continues to regain from information released this week.

At the meeting this week, the Bank of Japan left interest rate at the level of 0.1% per annum; however the Bank has made as tep, unexpected for the market increasing volume of the asset repurchase program to 65 trillion yen versus 55 trillion yen previously. This decision was unanimous, as well as the other one: program of purchases of long-term bonds was expanded to Y19 trillion from Y9 trillion. In addition, Central Bank surprised market again, by stating that according to the bank it will be reasonable to set inflation target at 1%, as economic forecasts are extremely hazy.

It became continuation of reaction to statistics: GDP in Japan fell by 2.3% y/y in Q4 2011, since European crisis and slowdown in the world economic rate prevented from recovery after natural disaster. Therefore, pressure on the Bank of Japan, which is planning to hold a meeting on Tuesday, is growing. New measures to support economy are expected from the regulator. Reasons for decline in GDP in the Country of the Rising Sun are obvious: reduction in global consumption and aftermaths of earthquake and tsunami, as well as the flood in Thailand. It is quite possible that Japanese economy will rise by 1.4-1.6% this quarter and will be able to demonstrate growth of 1.7% at the end of the year. IMF gave similar estimates.

Trade deficit has been recorded in Japan for the first time in 30 years. Exports in the country fell in December for the third time, which triggered trade deficit on annual basis. According to the Ministry of Finance, shipments reduced by 8% y/y last month. Budget deficit in Japan amounted to $32 billion (2.49 trillion yen). The head of the Bank of Japan Mr. Shirakawa said earlier that the regulator is prepared to reconsider volume of the asset repurchase program depending on the state of economy.