Japanese Yen: fact we should know

[Gulfstream]

Over the last 16 years, since the "currency panic" of 1995, the rate of the yen to the dollar, then to the euro, has fallen several times. Each time the weakening was due to feature of the monetary policy of the Bank of Japan and the large-scale placement of debt securities by the Ministry of Finance of Japan.

Having regard to the fact that the level of inflationary expectations in the economy remained consistently low, in the market for government debt, there formed a certain price corridor, which had an effect on the rate of the Japanese currency, the value of shares and the activity in capital flows (inflows and outflows).

During the last 16 years the rate of yen showed the ups and downs several times, which was due to the dynamics of the value of the government debt securities and the interest rate differential between Japanese and foreign assets.

[Gulfstream]

However, the weakness of the yen in the previous years (especially after a massive currency interventions) was based on a relatively stable situation on the raw materials market, which allowed the Bank of Japan and the Government to hold a very loose monetary policy, which was aimed at promoting export industries. This made it possible to hold a so-called break-even rate on debt securities in Japan to a very low level, which was able to attract more demand for shares and maintain a low interest rate on government debt.

In a certain way the yen rate is highly dependent on interest income on Japanese government debt securities. The lower the rate of return was falling, the greater the pressure on the yen was getting. Accordingly, the reversal dynamics of the Japanese currency started after the beginning of an increase in interest rates on the debt of Japan.

At the moment the Japanese authorities intend to produce as little additional securities on the open market as possible, and if the rate of return on debt starts to fall, it would mean the next stage of the Japanese currency weakness. Otherwise if interest rates on debt securities start to rise, the yen will certainly have a chance to strengthen, as this will cause the demand for shares from the local capital.

Increase in commodity prices is beginning to have a negative impact on the dynamics of international trade in Japan, as the cost of imports begins to significantly outperform the value of exports. On the one hand, this may have a negative impact on the yen, but on the other hand, it is forcing local authorities to abandon the policy of a weak yen to provide a refund or an inflow of capital into the domestic market.

[Gulfstream]

While the weakness of the yen remains, the market stays convinced that the course of the yen will continue to fall. Activation of carry trade operations with funding in the yen is another proof. However, the risks associated with an increase in inflation expectations among Japanese investors can trigger a rise in interest rates on the bond market and as a result reversal to the yen.

[zintek]

This document investigates the available data that may highlight the bring business in Japanese yen. We determine an individual or an market to be engaged in the bring business if it has a short place in yen and a lengthy place in other foreign exchange. The propensity of huge yen movements to be manipulated toward appreciations is consistent with the lifestyle of substantial carry roles, and other evidence from industry pro case provides some moderate assistance for an effect from the bring business. Information on bank loans and connection holdings by forex expose a large apparent yen burying place of the Japanese people Offi coal industry and modest carry roles in the Japanese and international financial areas. The Japanese personal non-banking sector has a large long foreign-currency place, but does not have a brief yen place, and is thus not engaged in the yen bring business in the combination. However, it is possible that exporters and investors in Asia use the derivatives marketplaces to protect some of their lengthy foreign-currency exposure, with the personal non-banking industry outside of Asia (incl. Using most protect funds) likely to be dealing with most of the associated bring visibility.

[mohamed reda]

trading with USD/JPY may be so risky for any trader right now the price is go bad you may predict the price in a direction but in fact the price will move any where so it may be risky to trade with this pair in my opinion i lost many trades by trading with this pair only so i do not prefer to trade with this pair ever .

[amrmorasamir]

trading with USD/JPY may be so risky for any trader right now the price is go bad you may predict the price in a direction but in fact the price will move any where so it may be risky to trade with this pair in my opinion i lost many trades by trading with this pair only so i do not prefer to trade with this pair ever .

No, this is one of the best couples that can trade of them because he respects the technical analysis and not as fast as the rest of the Japanese pairs so you could see that I'm doing it in the news, all of which belong to the dollar because it is the movement in the same direction as the news without reflection as big as the rest of the JPY crosses

[Imtiazhasan]

Thanks very much for this post. I myself did not know this fact. I though jpy moves only because of it's own monitory policy. Also when USD goes up, JPY goes down and vice versa. There are many things to learn from this post. I personally like to trade jpy pairs because most of the time it's easier to identify their direction.

[alif]

trading with USD/JPY may be so risky for any trader right now the price is go bad you may predict the price in a direction but in fact the price will move any where so it may be risky to trade with this pair in my opinion i lost many trades by trading with this pair only so i do not prefer to trade with this pair ever .

For me, USD/JPY is not so risky. This is one of my favorite pairs. This pair is not too volatile. I think this pair is suitable for new trader like me. But other JPY pairs, like GBP/JPY, EUR/JPY, these are not suitable for new comers. These are very volatile, and it mean these are very risky. So, in my point of view, USD/JPY is not risky.

[Grandhis]

trading with USD/JPY may be so risky for any trader right now the price is go bad you may predict the price in a direction but in fact the price will move any where so it may be risky to trade with this pair in my opinion i lost many trades by trading with this pair only so i do not prefer to trade with this pair ever .

i think, as long as you know how to put the risk on this pair, there would be no problem. This pair moves slower than any other pavorit major pair like FIbre or Cable. Any pair is risky, but we can manage risks, that is the due of trader

[PROPENSITY100]

Today Japanese yen one of the most popular and largely traded currency pairs. I like usdjpy and eurjpy because these pairs have low spreads and also provide good liquidity to the traders. I like high volatility of these pairs as it increases our potential to earn good profits on our capital.