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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Yen is making an attack. Overview for 30.03.2016
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The Yen is making an attack. Overview for 30.03.2016

The Japanese Yen is strengthening for the second day in a row; the “catalyst” is still vulnerable US Dollar.

The Japanese Yen is growing against the US Dollar on Wednesday afternoon. The current quote for the instrument is 112.33 (-0.3%). The Yen has moved very close to its local lows; they were already tested in March. It’s no good for the Japanese exporters and domestic consumption, but the market remains quite “sensitive” here as well.

Today’s statistics wasn’t too inspiring. The Japanese industrial production in February decreased by 6.2% m/m against the increase by 3/7% the month before, which is much worse than the expected number. On a year-on-year basis, the indicator decreased by 1.5%.

Any collapse in the industrial sector is a very negative factor for evaluating the country’s economic situation. The Japanese industrial production may have withdrawn endorsement from the GDP in the first quarter – this data will be published much later, but it’s safe to say right now that the GDP is sure to be weaker than it was in the fourth quarter of 2015. The list of the Japanese economy weaknesses is already quite rich, and now the industrial production can be added to it. It’s not the best piece of news.

Of course, the report about the industrial sector includes some kind of seasonal factor, such as stoppage in production in car-making factories and reduction in number of orders. Predictions concerning the indicator for March and April look quite optimistic right now, they are in the positive area.

As a matter of fact, weak statistics on the industrial production puts additional pressure on the Yen. However, right now investors are focused on the weak US Dollar after the speech Janet Yellen gave yesterday. There will be no interest rate increase in the USA in April, so the Dollar went under the “market press” immediately.
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