This currency pair is one of the most volatile, which makes it very popular in the foreign exchange market. This pair can bring you huge gains. The Japanese yen is very sensitive to any changes in the commodity market. It’s also one of the vital Forex currency pairs.
This pair demonstrates high liquidity. Both monetary units of this pair have the status of reserve currencies. It’s no wonder this pair is popular with traders.
With the volume of up to $4.9 trillion, the Japanese economy happens to be one of the most powerful in the world. Moreover, Japan and the United States are major trade partners for each other. These countries are one of the most advanced nations in the world. Japan is known for its high-tech products. As for the US economy, it’s more differentiated.
The Bank of Japan does its best to please exporters. An excessively strong yen ramps up the cost of Japanese exports overseas. As a result, the BOJ often intervenes to weaken the national currency. The BOJ carries out intervention regularly, thus keeping the public money in the optimal range.
The Federal Reserve is responsible for regulating the American financial system. The discount rate presents the primary regulator tool. Decisions made at Fed meetings have a powerful impact on the evergreen buck. The publication of such information always generates high volatility in the foreign exchange market.
This currency pair is most actively traded during the Asian session. However, sharp changes are also real during the American and European trading sessions. However, they don’t happen so frequently.
Being dynamic by nature, this currency pair is capable of passing 100 points a day. The couple demonstrates significant volatility during the formation of trends.
This currency pair is ideal for investors trading during the American as well as Asian sessions. The pair is quite sluggish during the European session.
If you want to derive excellent benefits from USD/JPY, you require considering the information obtained from technical and fundamental analysis. You should carefully watch the latest news from both countries. The publication of new macroeconomic indicators in Japan and America can significantly affect the quotes of the currency pair.
Crucial data includes GDP, the unemployment rate, as well as any changes in discount rates. When the market is flat, the pair can be influenced by less critical news. You need to take it into account when creating your trading strategy.
You’d better conduct technical analysis o the pair on various timeframes. You should determine a medium-term, short-term, and long-term trend for the asset. Find crucial technical levels. Make use of moving averages in your analysis. You should adequately determine resistance and support levels on every timeframe.
Conservative money management – that’s what you need when working with this pair. Avoid risking more than 5% of your trading deposit in one deal. Keep in mind that Forex is a serious business, and it has nothing in common with gambling. Only a wise approach to money management can save your trading deposit. If you are a newcomer, avoid trading in the flat market because it’s hazardous. Even experienced traders stay away from the flat market.