The Japanese yen fell against other major currencies today on speculation that the Bank of Japan will continue its efforts to weaken the currency. Even fears of the European debt crisis were not been able to help Japans currency.

Specialist estimated that Japans gross domestic product grew as much as 3.5 percent of the first quarter of 2012 from Q1 2011, when it fell 0.7 percent. Analysts predict that growth would slow as the export-oriented economy of Japan is under pressure from the strong currency and slowing demand for nations exports, caused by the global economic slowdown. It is likely that under such conditions the BoJ would not have any option but stimulate the economy more.

USD/JPY climbed from 80.18 to 80.36, following the rise to 80.55 the highest price since May 3, and EUR/JPY advanced from 102.06 to 102.45 as of 14:38 GMT today after it touched 101.90 the lowest rate since February 14.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

EURJPY Forecast The EURJPY was indecisive yesterday. There are no changes in my technical outlook. The bias remains bearish in nearest term especially if price able to make another clear break below 102.20 testing 101.00 – 101.50 support area. Immediate resistance remains around 102.75. A clear break above that area could lead price to neutral zone in nearest term testing 103.50 but as long as stays below 104.44 my overall intraday bias remains to the downside and I still prefer to sell on rallies.

GBPJPY  Forecast The GBPJPY had another indecisive movement yesterday. There are no changes in my technical outlook. The bias remains neutral in nearest term and price is still consolidating inside the triangle formation in medium term. Potential daily range remains between 127.80 – 129.37.

AUDUSD Forecast The AUDUSD was indecisive yesterday, but overall still able to maintain its bearish bias and hit 0.9911 earlier today. The bias remains bearish in nearest term especially if price able to make another clear break below 0.9910 testing 0.9790 area. Imme

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USDJPY moves sideways in a narrow range between 79.63 and 80.61. Resistance remains at the upper line of the price channel on 4-hour chart. As long as the channel resistance holds, downtrend could be expected to resume, and another fall towards 79.00 is possible after consolidation. On the other side, a clear break above the upper border of the channel will indicate that the downward movement from 84.17 has completed at 79.63 already, then the following upward movement could bring price to 83.00 zone.

Daily Forex Analysis

– (IE) Ireland Mar Industrial Production M/M: -2.7% v -3.2% prior; Y/Y: -5.7% v -3.0% prior
– (IN) India Forex Reserves w/e April 27th: $295.4B v $294.6B prior
– (RU) Russia Apr Consumer Prices M/M: 0.3% v 0.4%e; Y/Y: 3.6% v 3.7%e; CPI YTD: 1.8% v 1.9%e
– (RU) Russia Apr Core CPI M/M: 0.4% v 0.5%e; Core CPI YTD: 1.9% v 1.4% prior
– (US) Apr Change in Nonfarm Payrolls: 115K v 160Ke; Change in Private Payrolls: 130K v 165Ke; Change in Manufacturing Payrolls: 16K v 20Ke
– (US) Apr Unemployment Rate: 8.1% v 8.2%e; Underemployment Rate: 14.5% v 14.5% prior; Change in Household Employment: -169 v -31 prior
– (US) Apr Avg Hourly Earning M/M: 0.0% v 0.2%e; Y/Y: 1.8% v 2.0%e; Avg Weekly Hours: 34.5 v 34.5e
– (BR) Brazil Apr PMI Services: 54.4 v 53.8 prior
– (MX) Mexico Apr Consumer Confidence: 97.2 v 93.7e
– (CA) Canada Apr Ivey Purchasing Managers Index: 52.7 v 61.0e

– European and US equity indices have traded lower following this morning’s April US employment reports. Hiring slowed sharply in April, with 115K new jobs versus 154K new jobs in March, marking the third sequential month of slowing job gains. However, analysts pointed out that the March figures were revised higher and generally blamed the weak showing on “payback” from the gains seen in the warmer winter months. Read more…

Euro is seeing a boost today as financial ministers in the eurozone agree to raise the firewall meant to contain the spread of sovereign debt crises to 800 billion euros. The move is only temporary, though, and designed to help the eurozone navigate the tricky waters expected over the next year or so. By June 2013, the permanent capacity is supposed to be set at 500 billion euros.

The news is helping the euro, though, by providing a measure of security and proving that eurozone leaders can be proactive in preventing further problems like those seen with Greece. The 800 billion euros represents the combined firepower of the EFSF (a temporary facility) and the ESM (the permanent facility). Once the EFSF stops making new loans, only the ESM will remain, with its 500 billion euro capacity.

Additionally, the new Spanish budget has been presented, and the government has cut 120 billion euros from the budget, instituting a measure of austerity. There are hopes that this will be enough to prevent collapse, and help Spain get back on track even if the country needs the help of the firewall. For now, the news is good enough to give the euro an edge, though, especially when combined with optimism about the US economy.

At 13:43 GMT EUR/USD is up to 1.3348 from the open at 1.3306. EUR/GBP is up to 0.8343 from the open at 0.8335.

If y

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We believe there’s at most 50% chance of a RBA rate cut in April. Although intermeeting economic indicators suggested a weakening in Australia’s growth, the RBA has history of surprisingly the market. Moreover, the apparently contradicting comments from the central bank and the Treasury suggested that policymakers would stand aside for another month. That said, further easing later this year remains likely.

Domestic economy in Australia has showed signs of moderation over the past month. Unemployment rate rose to 5.2% in February, from 5.1% in January with payrolls falling -15.4K during the month. GDP growth eased to +0.4% in 4Q11, from a +0.8% expansion in the prior quarter, as driven by the downside surprise in farm inventories which subtracted -0.6% from GDP growth. This suggested that growth in Australia is below trend as year-ended growth in 2011 around -0.5%below the RBA’s forecast published in the February SMP.

Indeed, the RBA has softened its tone recently with the Governor Glenn Stevens stating that non-farm GDP growth had been ‘somewhat below trend’ in 2011 and ‘monetary policy can play a role in supporting demand, to the extent that inflation performance provides scope to do so’. These indicated that further easing remains in the RBA’s agenda.

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