One of the most popular currencies to trade in Forex is the Japanese yen. The yen is one of the most liquid currencies in Asia and the third most-traded currency in the world. When the Japanese economy is strong, the yen strengthens against the dollar. But, you need to understand the historical trends of the yen to know when to trade this currency.
Known As A Safe-Haven Currency
The Japanese Yen is one of the most commonly traded Asian currencies. It is also known as a safe-haven currency, as it tends to rise in times of uncertainty. Traders can speculate on this currency pair by following news releases and economic news from Japan. Several Forex brokers, including Admirals, offer trading options in the Yen. The Yen is available in the Euro and Dollar currencies. You can trade the currency with a MetaTrader platform.
The USD/JPY currency pair is a popular pair to trade-in. Its value varies greatly, with the USD representing the base currency while the JPY represents the foreign currency. The pair is one of the most popular pairs in Forex trading, with daily turnovers of over $900 billion. It accounts for 17.7% of all Forex trading activity and is one of the most popular pairs.
There are many benefits to trading the USD/JPY currency pair. It is one of the most liquid currencies and has numerous trading vehicles, such as E-minis, options, and even ETFs. It is beginner-friendly and offers excellent liquidity and a smooth trend. And, because of its popularity, the jpy currency is also highly correlated to Japanese commodity markets.
Avoid Losses And Maximize Profits
The USD/JPY currency pairing has been relatively stable, but it is sensitive to Japanese interest rates. While the Bank of Japan maintains low-interest rates for a large part of the world, sudden increases in Japanese interest rates can dampen USD/JPY trading and limit liquidity. Hence, traders should closely monitor the USD/JPY currency pair’s trend to avoid losses and maximize profits. The currency’s price fluctuations can be unpredictable, and the yen can easily stall a trading strategy if you aren’t careful.
Besides interest rates, the USD/JPY currency pairs are highly sensitive to the direction of the global economy.
While the US economy continues to grow faster than Japan’s, the yen has been weaker and trending downward against the US dollar over the past several years. However, the Japanese government has recently introduced several measures to boost its economy. Traders should monitor news regarding new measures and follow them closely.
The USD/JPY currency pair has a daily turnover of $902 billion, which makes up 17.7 percent of the total market volume in the forex trading world. The Yen was introduced into circulation in 1871 and officially adopted by the Meiji government on June 27. Its symbol is the “Yen” and is, therefore, an abbreviation for “round object.” Despite the popularity of the USD, however, the yen suffered during World War II, when the Japanese economy collapsed. After the war, the US dollar gained its status as the official reserve currency of the world.
Most Popular Currency Pairs
Day traders in the USD/JPY pair usually prepare for the day before the market opens. They may have their Excel sheet of historical exchange rate data and an economic calendar on hand. Their trading strategy is usually based on accumulating dollars in the expectation that the USD will rise, and then selling them for a profit later. Alternatively, a major Japanese investor will pull their money out of the US and convert it back to the JPY currency. Traders who act on this information will be solely responsible for their actions.
The USD/JPY is one of the world’s most popular currency pairs. The USD depreciates when the NFP report reveals high unemployment rates, low hourly wages, and fewer new jobs in the previous month. This will have a major impact on the volatility of major currency pairs. Another method is to enter a futures market. This method is much more common and involves standardized contracts. For example, if you want to trade the USD/JPY pair with a small amount of money, you could use the futures market.