Japan is one of the major economic forces in Asia, and also in the international sphere. Japan is one of the world's largest exporters. And because of the huge trade value between Japan and the big countries like America, Europe, multinational companies have the need to convert their currency into yen (and vice versa) on a regular basis. The low and consistent interest rate in Japan has made the Yen a popular currency in the form of Currency Carry Trade trading (where investors sell certain currencies with low interest rates and then use the funds it earns to buy other currencies with tribal rates Higher interest rate). And for that reason, this pair is one of the traded pairs traded in the Forex market.
Japanese Yen currency is very often used in Asia and is the fourth most traded currency in the world. In the 1980s, some analysts believe that one day the Yen will stand just as flat with the US Dollar as the world currency. The deterioration of Japan's economic conditions then made those hopes disappear. The main impact of the deterioration in Japan's economic conditions is that the central bank of Japan is forced to keep its interest rates at a very low rate in order to foster economic growth. Yen remains one of the most important currencies in forex trading in global markets.
Characteristics of USD / JPY pair
The USDJPY has the following characteristics:
Spreads from forex brokers (on average): 2-3 pips;
Daily range (average): 50-100 pips;
Best Trading Time: Asian / Tokyo Session (06.00 - 15.00 WIB).
Factors affecting the movement of USD / JPY pair
As discussed earlier, selling Yen as part of Currency Carry Trade is one of the popular strategies. The popularity of these types of trade depends entirely on global economic conditions. When global economic conditions are in good shape and volatility is low, traders view Yen Carry Trade as a good way to make a profit. But when volatility increases, Yen Carry Trade tends to be abandoned. It should be noted that traders of this type of trade are large institutions, so the flow of money coming in and including in large numbers. In a fairly stable period (a bit of a sentiment in the global economy), Yen Carry Trade was very popular, and made a considerable selling pressure that kept the yen weak. But when global market volatility increases, the opposite result we can see, Yen strengthened.
Another factor that is quite influential is Japan's dependence on Import Commodities and Export Results. Japan relies heavily on imports of oil products and other natural products, so that rising commodity prices tend to have a negative impact on the Japanese economy and cause the Yen's currency to weaken. Slow economic growth in Japanese export partners will also cause the Japanese economy (which relies on exports) to weaken and weaken the yen. Such Export Dependence may also provoke intervention from the Bank of Japan when the yen shows excessive strengthening. Japan's central bank has a well-known reputation for interfering in the Forex market when yen movements have the potential to reduce the country's profits from exports or potentially reduce Japan's economic growth rate. Forex traders must understand this, so that later will not be surprised if the intervention of the Central Bank of Japan caused a sudden change in the movement of this pair.
As one of the most commonly traded currencies in Asia, the Japanese Yen is also used as a leading indicator for reviewing the general conditions of Asian economic growth. When economic conditions in Asia become unstable, traders will react by buying or selling the Yen in lieu of currencies from other Asian countries that are quite difficult to trade (for profit).
Here are the factors that play a role / cause volatility in USD / JPY pair:
Intervention of any kind by the Bank of Japan on the value of the Yen;
Any reporting related to the decline in production of imported Japanese commodities;
Domestic economic and trade reports;
Economic and trade reports from the United States;
And with a small enough impact, the price of world crude oil;
As well as natural disasters that hit New Zealand.
Characteristics of USD / JPY pair
The USDJPY has the following characteristics:
Spreads from forex brokers (on average): 2-3 pips;
Daily range (average): 50-100 pips;
Best Trading Time: Asian / Tokyo Session (06.00 - 15.00 WIB).
Factors affecting the movement of USD / JPY pair
As discussed earlier, selling Yen as part of Currency Carry Trade is one of the popular strategies. The popularity of these types of trade depends entirely on global economic conditions. When global economic conditions are in good shape and volatility is low, traders view Yen Carry Trade as a good way to make a profit. But when volatility increases, Yen Carry Trade tends to be abandoned. It should be noted that traders of this type of trade are large institutions, so the flow of money coming in and including in large numbers. In a fairly stable period (a bit of a sentiment in the global economy), Yen Carry Trade was very popular, and made a considerable selling pressure that kept the yen weak. But when global market volatility increases, the opposite result we can see, Yen strengthened.
Another factor that is quite influential is Japan's dependence on Import Commodities and Export Results. Japan relies heavily on imports of oil products and other natural products, so that rising commodity prices tend to have a negative impact on the Japanese economy and cause the Yen's currency to weaken. Slow economic growth in Japanese export partners will also cause the Japanese economy (which relies on exports) to weaken and weaken the yen. Such Export Dependence may also provoke intervention from the Bank of Japan when the yen shows excessive strengthening. Japan's central bank has a well-known reputation for interfering in the Forex market when yen movements have the potential to reduce the country's profits from exports or potentially reduce Japan's economic growth rate. Forex traders must understand this, so that later will not be surprised if the intervention of the Central Bank of Japan caused a sudden change in the movement of this pair.
As one of the most commonly traded currencies in Asia, the Japanese Yen is also used as a leading indicator for reviewing the general conditions of Asian economic growth. When economic conditions in Asia become unstable, traders will react by buying or selling the Yen in lieu of currencies from other Asian countries that are quite difficult to trade (for profit).
Here are the factors that play a role / cause volatility in USD / JPY pair:
Intervention of any kind by the Bank of Japan on the value of the Yen;
Any reporting related to the decline in production of imported Japanese commodities;
Domestic economic and trade reports;
Economic and trade reports from the United States;
And with a small enough impact, the price of world crude oil;
As well as natural disasters that hit New Zealand.
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