Business Daily Media
Wednesday, January 22, 2025 10:53:11 AM

The Times Real Estate

.

Aspects traders need to know about the Japanese yen to trade better – Octa

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 3 May 2024 - Understanding the intricacies of the Japanese yen (JPY) is essential to excel in trading. It is recognisable by its symbol ¥ and holds immense importance in the Forex market as a major reserve currency due to its popularity in carry trades.



Octa


Impressively, it ranks as the third most traded currency, following only the U.S. dollar and euro. This popularity is thanks to favourable trading conditions, such as high liquidity and faster execution times. Moreover, market analyses and trading forecasts extensively cover the JPY, so traders have plenty of information to make informed decisions and seize trading opportunities.

JPY is a compelling asset to keep in mind, no doubt. And if you are planning a JPY trade at Octa, here's what you should know.


Safe-haven status and risk sentiment

The yen is often considered a safe-haven currency, meaning it tends to increase in value during periods of global economic uncertainty or market turmoil. This status is due to Japan's stable political environment, low inflation history, and current account surplus.

For instance, during the 2020 pandemic, financial markets experienced extreme volatility, and investors sought safety in the JPY, among other assets. This demand caused the JPY's value to rise against other major currencies.

What's important to note, though, is that the same safe-haven status can also lead to an overvaluation that negatively impacts Japan's export-driven economy. The Japanese government and central bank may intervene to stabilise the JPY's value. Therefore, it is better to diversify and not rely on the yen too much.

Economic indicators and events
Gross Domestic Product (GDP) growth, employment rates, and inflation levels are key to assessing a country's economic health.

This is how a trader would roughly analyse these factors: Japan's GDP has been gradually growing when measured in yen but suffered if assessed in U.S. dollars due to the yen's depreciation. Despite a shrinking population, per capita incomes are still rising even with a stagnant GDP. If inflation stays positive and interest rates keep going up, the yen is likely to get stronger.

The unique aspect of Japan's economic data is the Takan Survey. It focuses on Japanese companies with a minimum capital requirement or those considered highly influential. They are asked about trends and economic conditions affecting their industry in the next quarter and year. Being released before Japan's GDP data, the Takan Survey is seen as an early indicator.

Currency interventions and government policies

The Japanese government has specific policies regarding currency interventions and interest rates. For instance, the Ministry of Finance intervened in currency markets in the past by selling dollars from their foreign reserves to support the yen's value. This intervention process, initiated by the finance minister and executed by the Bank of Japan (BOJ), tends to increase volatility in the yen's value.

Japanese officials are very subtle. They closely monitor and occasionally hint at extraordinary actions to prevent excessive movements in the Forex market. They use statements like ‘We will not tolerate speculative movements’ or ‘We're ready to take decisive action’ to guide market expectations.

Recently, the BOJ made an important policy shift by ending eight years of negative interest rates and raising the short-term policy rate from –0.1% to between zero and 0.1%. BOJ's governor, Kazuo Ueda, said they will be careful, keeping an eye on the economy, and continue with policies that support growth without causing problems. If they raise interest rates in the future, it will be done slowly to avoid sudden changes.

Risk management and trade execution
Here are some other key aspects to consider when trading the yen:

  • JPY pairs have two digits less in their quotes compared to standard quotes.
  • Common JPY pairs include USDJPY, EURJPY, GBPJPY, and AUDJPY, known for their high volatility.
  • GBPJPY can move up to 200 points in a trading session.
  • The yen sees its major movements during the Asian trading session and is less affected by European news.
  • The European session is preferable for trading JPY pairs. The BOJ doesn't intervene during this time, which reduces sudden price changes.
  • In addition to economic and political events, key factors to monitor are export and import volumes and energy prices.
  • The Japanese yen often correlates with global equity markets, especially the Nikkei 225 stock index. During times of market turbulence, the yen can strengthen as investors bring funds back into Japan.
Market dynamics of JPY pairs
USDJPY, known as The Gopher, is the second most traded currency pair globally. The best time to trade USDJPY is during the overlap of the London and New York sessions (12 p.m. and 4 p.m. UTC) for tighter spreads and increased volatility.

GBPJPY is also volatile and offers trading opportunities for short-term speculators. The most volatile times for GBPJPY are during the Asian and European sessions, particularly between 6:30 a.m. and 2:30 p.m. UTC. However, during the Euro-Asian overlap, trading activity may not always increase as expected, and it can be one of the slower parts of the trading day.

In 2024, the Japanese yen continues to be a vital currency in Forex trading and the global economy. While it can be tricky, traders must understand its dynamics to seize opportunities effectively. Also, they should be mindful of risks, such as how the Bank of Japan's policies can influence the yen's value and increase its volatility at specific times during the trading day, among other factors.
Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries with more than 42 million trading accounts. They provide free educational webinars, articles, and analytical tools to help clients reach their investment goals.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

Octa has also won more than 70 awards since its foundation, including the 'Best Educational Broker 2023' award from Global Forex Awards and the 'Best Global Broker Asia 2022' award from International Business Magazine.

News from Asia

Galaxy Macau Celebrates 34 Awards, Continuing Its Ongoing Legacy of Luxury in Tourism and Leisure

MACAU SAR - Media OutReach Newswire - 17 January 2025 - As the world step into 2025, Galaxy Macau™, the world-class luxury integrated resort (hereafter referred to as "Galaxy Macau"), has proudly ...

The Functional Foods for Wellness Summit BKK 2025 concluded successfully in Bangkok, Thailand, on January 16th

BANGKOK, THAILAND - Media OutReach Newswire – 17 January 2025 - The Functional Foods for Wellness Summit BKK 2025 concluded successfully in Bangkok, Thailand, on January 16th. The summit received ...

1st APAC Intelligent Finance Forum and "Embarking on Prosperity Journey Together" Partnership Convention Concluded Successfully in Hong Kong

HONG KONG SAR - Media OutReach Newswire - 17 January 2025 - On January 16, 2025, the 1st APAC Intelligent Finance Forum, hosted by the Global Corporate Scale Management Association and co-organ...

CUHK: The influential academic leader in the world

HONG KONG SAR - Media OutReach - 15 November 2021 - Established in 1963 and still expanding, The Chinese University of Hong Kong (CUHK) is ranked among the best research universities internationall...

Nomination period for the Broermann Medical Innovation Award started

Prize money of one million euros higher than the prize money for the Nobel Prize for Medicine Award honors researchers worldwide who have done pioneering work in medicine, biotech...

Galaxy Macau Collaborates with "Luzhou Laojiao · Guojiao 1573" Spring Festival Tasting Pop-Up Store Debuts

Experience Exclusive 2025 Yisi Snake Year Baijiu at Galaxy Macau Until March 31, 2025 MACAU SAR - Media OutReach Newswire - 18 January 2025 - In the spirit of the Lunar New Year, the world-class ...

VinFast officially enters the Indian market with the launch of the VF 6 and VF 7

NEW DELHI, INDIA - Media OutReach Newswire - 18 January 2025 - VinFast officially announces its first electric vehicles for the Indian market at the Bharat Mobility Global Exp...

Kim Yew Integrated Celebrates 40 Years With $68,000 Donation To The Business Times Budding Artists Fund

SINGAPORE - Media OutReach Newswire - 20 January 2025 - Led by a new management and board since 2021, Kim Yew Integrated marked its 40th anniversary with a $68,000 donation to The Business Times B...

Trend Micro is Recognized as a 2024 Gartner® Peer Insights™ Customers’ Choice for Cloud-Native Application Protection Platforms

The Gartner® Peer Insights™ Customers' Choice Distinction is based on feedback and ratings from end-user professionals who have experience with the product or service HONG KONG SAR - Media OutReac...

Wildberries Expands AI-Based Tools for Marketplace Users

MOSCOW, RUSSIA - Media OutReach Newswire - 20 January 2024 - Wildberries, one of the largest e-commerce platforms in Eurasia, has expanded its use of artificial intelligence (AI) to enhance the us...

When Will Infrastructure Companies See Gains from Generative AI?

A lot of questions are swirling about the state of generative AI right now. How far along are companies with their bespoke GenAI efforts? Are orga...

DLPA partners with Crestcom to bring its leadership training solutions

Dynamic Leadership Programs Australia (DLPA), a leading provider of leadership training and workforce strategy solutions, has joined forces with r...

Infosys and Tennis Australia Create New Generative AI Innovations at the Australian Open 2025

Infosys (NSE, BSE, NYSE: INFY), a global leader in next-generation digital services and consulting, in partnership with Tennis Australia, has unv...

UBH Group Pioneers Australia's Path to Nuclear Sovereignty

Sovereign technology company, UBH Group, has achieved a landmark milestone as the first organisation in the Southern Hemisphere to secure ISO 1944...

The unsung heroes: How MSPs can safeguard SMBs while boosting profitability

In Australia, small-to-medium-sized businesses (SMBs) form the backbone of the economy, accounting for 95% of all businesses. Yet, they remain pri...

Businesses grapple with wage compliance as new laws take effect

Australian businesses are navigating a landscape of rising compliance complexity as new wage theft laws under The Closing Loopholes Acts take hold...

Sell by LayBy