Basic Characteristics of USD JPY trading

USD/JPY trading

The yen which is the most liquid currency in the whole of Asia’s economy is also a form of proxy for the entire Asian economic growth. When instability is observed in the Asian sector, traders generally respond by selling or buying the yen as a replacement to other Asian nation’s currencies that are not as easy to trade. It is also worth mentioning that the Japanese economy registered a record period of low economic growth and relative low interest rates. When trading USD/JPY, a leading indicator of its future price direction is the Japanese economy which we must pay attention to.

Many forex circles recognize the Yen’s influential role in the carry trade. Due to Japan’s very low interest rate policy that has held for most of the 1990s to 2000s, traders borrowed the Japanese currency at a small cost and then used it to invest in other better yielding currencies. This generates benefits from the rate differentials.

Thus in the global context, the constant borrowing of the Yen proved appreciation to be a challenging task. Even so, the Yen trades with the same basic fundamentals as any other currency.

One of the dully noted major influences in the Japanese currency value is the US Dollar. This unpredictable behaviour is the reason why forex traders use technical analysis to understand the dynamic of this pair, on a long term perspective. Regular trading ranges may vary from 30 or 40 pips to as high as 150 pips.


Technical analysis is provided to our clients complimentary, does not comply at all times with the requirements for independent investment research and should not be considered as investment advice. Independent personalized advice may be required.

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RISK WARNING: Trading in Forex and Contracts for Difference (CFDs), which are leveraged products, is highly speculative and involves substantial risk of loss. It is possible to lose more than the initial capital invested. Therefore, Forex and CFDs may not be suitable for all investors. Only invest with money you can afford to lose. So please ensure that you fully understand the risks involved. Seek independent advice if necessary.

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