The Japanese yen has found strength in the Asian session to break below 75.70 making a new low at 75.65 because of the falling of Sep unemployment rate to 4.1% while the market was waiting for 4.5% from 5.3% in August and also Sep industrial productions release which has shown declining by 0.4% while the market was waiting for stronger falling by 2.3% after rising in August by 0.4%. keeping greenback trading versus the Japanese yen below 76 despite the intervention threats from BOJ which kept the interest rate unchanged at 0.1% this week predicting this FY GDP to be by 0.3% from 0.4% in last July and next year to be 2.2% from 2.9% previously in last July and concerning 2013, it has predicted its GDP to be 1.5% warning of the risks facing the US economy and the global economy and its impact on the Japanese economy amid the EU debt crisis and Japanese yen strength which did not cap Japanese merchandise total trade balance from making ¥300.4b surplus while the market was waiting for just 198b from 775.3b deficit in August
BOJ has shown also uncertainty about the commodities prices outlook but it expected core CPI to be at 0.0% this FY from 0.7% in July and for next year it has predicted it to be at 0.1% from its previous estimation in last July too at 0.7%.and this was obvious in today data which have shown again prices down side risks and persisting of deflation as Sep Japanese National CPI came at 0.0% y/y while the market was waiting for 0.1% from 0.2% in August and also the core CPI of September came at -0.4% as expected from -0.5% in August with no monthly change from 0.1% in August.
God willing, USDJPY can face now resisting levels at 76.47, 77.07, 77.47, 77.84, 79.05, 80.22, 81.46 then 82.22 while the way down can face by the Japanese intervention in the case of passing the new recorded level today in the Asian session at 75.65 despite the Japanese Fin min Azumi's warning which came last Tuesday that the current Japanese yen exchange rate does not reflect fundamentals as it reflects the traders' speculations.
FX Market Strategist
Walid Salah El Din