Japanese Yen is the most influent currency of all the Asian ones. The American and Canadian traders who do not like to trade during the day and who would like to earn money on Forex at night are especially interested in USD JPY. This pair allows them trading during the night and satisfies their unique physiological needs. Not only it is convenient for the people with different biological hours, but it is also very important for traders who use the fundamental analysis in their trading.
It is a common fact that the natural resources of Japan are pretty poor and on this occasion Japan’s economics is extremely dependent on the export/import ratio. Whenever the commodity prices rise, the USD JPY currency pair strengthens. The economics of Japan grows much slower than the economics of the Unites States, Canada, the European and other highly developed countries. This is the main cause why the JPY tends to get weaker more often that to go up.
The next specific feature of the Yen is in the constant interventions of the Japanese Central Bank. It seems that the Japanese government is the most controlling one - its efforts are always directed to strengthen the national currency. But most of the time these attempts bring success in a short run. The artificial changes can never lead to the natural results. That is why in the long run the Bank of Japan’s intervention causes the depreciation of the JPY pair. If you are a short-term trader then you need to wait for these manipulations and go short for some period of time. After the temporary effect will be vanished there is a clear reason to go long for this particular currency pair.
When you trade Japanese Yen to USD you need to know that historically this currency pair has an incredibly powerful resistance level at 146 as well as the strong support level at 76. JPY holds the third position among all currency pairs on Forex: only USD and EUR are more volatile. Nevertheless the most volatile pair ever does include the Japanese Yen and it is GBPUSD, the currency pair which behavior and typical traits we are going to cover in future.
The USD JPY pair is well-known as the instrument that often moves in a range before this continuous range is broken and the price finally goes for a trend. This happens because of the interest of fund managers from Japan to the short-term trends. What if a fund manager goes short on USD/JPY? In this case the manager would for sure place orders above the current price. This will help to make dips work for the profit of the manager.
This instrument has less false breaks as some other currency pairs usually have so limit pending orders are much more efficient than the stop orders when you are trying to trade the Yen. For the people who use the Fibonacci retracements the information that most of the time the price does not reach the 50% value will be especially useful.
The USD/JPY pair is much more dependent on the fundamental analysis rather than other major pairs.
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