How to Trade Forex

The USD/JPY stands for the U.S. Dollar and the Japanese Yen. It’s the only major cross with an Asian monetary unit. Japan is an export based economy and its central bank is the entity that regulates the value of the nation’s currency. Often, investors hear that the Bank of Japan intervenes in the Forex trading market. Its purpose is usually to maintain the level of the currency low, so that it serves the export sector better. An overvalued Yen deters other countries from purchasing their products, and of course as you’ve guessed, it hurts their economy.

The USD/JPY is affected by a wide number of factors. If you look at the historic prices from this year alone, you’ll find that the terrible natural disasters that took place in March caused the Yen to dip. Its path to recovery led investors to buy the Yen.

Note that the differential between the interest rates of the Bank of Japan and those of the Federal Reserve also influence the value of these two currencies. When the Federal Reserve intervenes in the market, the U.S. Dollar strengthens.

The USD/JPY enjoys favoritism by millions of traders around the world; and because of such, it’s not difficult to buy or sell the pair. Following important fundamentals such as Trade Balance or the Tankan Survey can also be extremely helpful when trying to reach sky high profits. You’ll find useful tips for trading the Tokyo market at any of the Forex sites.

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