Does Japanese yen grow amid the drop-down of US bonds?

Forex news. The drop-down of US government bonds continues, and in such situation many investors traditionally seek for a “quiet harbour” in the arms of Japanese national currency. That is why yen has demonstrated a serious advantage against American dollar.

Today the data, according to which PMI in May was fixed at the growth level of 0.9% m/m against the growth of 2.5% m/m in the previous month, was publicly announced. The index of corporate goods prices has considerably raised; namely, 2.5% y/y against 2.2% y/y one month earlier (taking into consideration the fact that the forecast was at the level of 2.4% y/y).

Today’s meeting of the Bank of Japan has finished as expected: the interest rate has not increased, it has remained at the previous level <0.10%.

It is most likely that in order to avoid unnecessary risks, investors will support the process of Japanese strengthening in relation to American dollar. However, one shall remember that excessively rapid growth of yen can be “disliked” by Tokyo, which can provoke interventions, aiming to weaken Japanese currency.

Our last forecast that resistance at the level of 81.30/40 is a strong obstacle and will turn the price towards lowering is verified. The cost has lowered to 79.50/60 mark, a historical minimum during a rather lasting period. There has been a fall lower than this mark – to 79.20, but for a short term – the prices run in the range of 79.50/60. Indexes are certain of a further fall. Crossing a historical margin will open access to 79.00/78.90 mark and further – to 78.30/40. An “attack” of minimum at 76.50/40 mark can be expected in the long-term perspective.

The forecast is prepared by experts of the Department of In-Depth Trade System Study of Masterforex-V.