The given currency pair demonstrates high liquidity. Each of the currencies of this pair is a reserve. The Japanese economy is one of the world leaders in terms of power, with its $4.9 trillion volume. The United States and Japan appear to be crucial trade partners for each other. They are one of the most developed countries around the globe.
Japan’s high-tech products are known worldwide. Unlike the Japanese economy, the US is more diversified.
Japan’s primary financial institution is mainly concerned about pleasing exporters and does corresponding manipulations with the national currency for this purpose. A too strong yen makes Japanese products more expensive. It makes the BOJ intervene to return the yen to the set range.
The Federal Reserve regulates the US financial system. The interest rate is the critical regulator tool. Fed meetings greatly influence the greenback. The publication about these meetings creates excellent volatility in the Forex market.
The Asian session is the period when the maximum activity on this asset is demonstrated. However, abrupt changes are possible too during European and American trading sessions.
This dynamic currency pair can pass up to 100 points a day. It shows enormous volatility when trends are formed. You’d better trade this currency pair during Asian or American trading sessions. Avoid trading it in the European session because, during this period, the asset demonstrates the sluggish behavior.
If you are eager to trade USD/JPY successfully, you need to consider the information derived from fundamental and technical analysis. You require closely watching the latest news from both nations. The release of new macroeconomic indicators in both countries can significantly impact the quotes of the currency pair.
You should pay much attention to the unemployment rate, GDP, and any changes in interest rates in both countries. The currency pair can be influenced by less critical news when the market is flat. Consider this nuance when developing your strategy.
Use various timeframes to conduct technical analysis on the pair. It’s up to you to determine a short-term, long-term, or medium-term trend for the asset. Spot key professional levels. Utilize moving averages in your analysis. You should precisely determine support and resistance levels on every timeframe.
Use conservative money management. Your maximum risk shouldn’t exceed 5% of your trading deposit. It’s not a sort of gambling but a serious business. With a wise approach to money management, you will manage to preserve the bulk of your trading deposit. Don’t open trading positions in the flat market if you are a newbie because it’s dangerous for your deposit. Even experienced investors don’t prefer trading in this condition of the market.