The Japanese government is worried about Japan’s economic prospects, thereby downgrading the economic forecast for the 3rd time this year. Obviously, the national economy feels external pressure caused by the eurozone crisis and the global economic slowdown. So far, the strengthening of the Japanese Yen has been the major concern for the Japanese authorities because it hinders export, thereby making Japanese products more expensive for importers. It is not a secret that the Japanese economy is an export-oriented one.
At the same time, the research group of BTMU assumes that the Japanese government will keep urging the Bank of Japan to implement further monetary easing. The latest steps in this direction seem to have been ineffective. Therefore, the probability of further currency interventions increases.
Some Japanese officials also support the idea of intervening in the currency market in order to curb the strengthening of the national currency. Therefore, analysts expect the monetary policy to be more aggressive in 2013.
Forex.
The chart below, courtesy of , reflects the current state of affairs in the market of USDJPY. The currency pair is rallying. A break above the 78.86 high will start another upswing, which will be represented by wave A/B of Daily 2. In this case, the rally may encounter resistance around 79.21. Alternatively, the current bullish move will be completed as soon as the price overcomes the bottom of the MF sloping cannel and consolidates below the MF pivot 78.28. (as shown below):
