Currency Pair Trading of US Dollar and Japanese Yen – Kavan Choksi Japan
USD (US dollar) and JPY (Japanese Yen) is one of the most popular pair in currency pair trading. It is now one of the top choices of beginners as well as seasoned traders alike. Since the global economic crisis in the year 2008, the Japanese Yen has remained a reliable currency, and it is not becoming the third-largest currency to be considered a safe haven for forex investors. The pairing of USD/JPY plays a crucial role in the trading activities through the Asian markets, and JPY is also sold or bought to substitute any other unpredictable currencies in this regional market.
As we know, the Japanese Yen is one of the top reserve currencies in Asian markets. The major benefit of JPY for traders is its high liquidity possibility, with which the traders can try to capitalize on the market movement in the countries where the currencies are otherwise to trade in larger volumes. High liquidity is always a benefit to the traders in the Asian market as it is always highly volatile.
Kavan Choksi Japan on USD/JPY pairing
As we discussed above, at larger volumes, JPY is considered to be a safe haven by the forex traders in the Asian market, whereas the USD/JPY pairing can offer greater stability and liquidity compared to other such pairings. Kavan Choksi Japan suggests thatthe forex traders should also try to study the other market factors too, which may affect the price movements of JPY.
One major advantage of USD/JPY pairing in trading is the high rate of daily liquidity, which may create some volatility that generates better trading opportunities. As USD/JPY is correlated strongly to the commodities market in Japan, these price fluctuations can create more opportunities by making the price movements much easier to predict than the other currency pairs.
Also, USD/JPY pairing features a limited bid-ask spread on comparing the same with any other currency pairing of USD with Asian market currencies. The low spread will also help increase the profit for traders. However, there are some limitations also to consider while you try to place a trace, which starts with the volatility of such a pairing. When compared to many other top currencies pairing, the high volatility of the USD/JPY may prevent this pair from functioning as the trader’s safe haven always. Even though there is a greater chance of opportunities due to the volatility, it may sometimes lead to quick losses, too, which the traders to be aware of. So, one should pay close attention to all the cycles to identify the scope of a loss.
Trading on USD/JPY
The expert suggestion is that one should target trading on USD/JPY during the times of peak market activities. This window may represent the highest potential to earn profit from the price movements. You should also keep in mind that even when forex trading is open for 24 hours, traders need to be diligent about their trade timings to leverage the benefit of the peak trading window.
So, Kavan Choksi Japan reinstates that USD/JPY is one of the high liquidity pairings that plays a crucial role in Asian forex market trading. Whether you are a beginner or an expert, the key to success is to pay close attention to the market factor to identify the right windows.