JPY Rising

in Japanese

Just when you thought it was going to look appetizing for importers to again seek out goods from Japan the Japanese Yen began an ascent against nearly every major currency, except of course for the US dollar which is in a tailspin. Much of the pair's current underpinnings with regard to the Japanese Yen not making gains against the dollar have to do with recent US quantitative easing being done by the Federal Reserve. Such "easing" has caused the dollar to lose value even against the Japanese Yen, which might be a celebrated event among Japanese exporters but for traders it signals an all ballgame.

Everything certainly seems to be going upside down where the online forex exchange is concerned and we are all certainly not accustomed to these trends but we had better learn quickly. I suppose it goes back to my favorite saying "The first step in knowing everything is admitting that you know nothing" and in this market that certainly is the case is it not folks? However the Japanese are not a nation to be out done in the fiscal arena (or any other for that matter) and are doing their own QE.

In a short while the Bank of Japan will begin to purchase 5 trillion Yen in an effort to ease its own beleaguered economy. Of course whether or not any of these efforts prove effective is anyone's guess at this point. Vigilance and due diligence at this point will be a trader's best friend in assessing the USD|JPY for many months to come it seems. The Japanese Yen will almost certainly continue to rise against all other currencies except for the USD due to its impending retracement and improved domestic market conditions. Indeed the United States is still in bad shape, Japan just happens to be in worse shape.

Any time there is risk there is the chance for reward, and while the GBP/JPY does tend to have erratic swings if someone stays with a trade for more than a day it will typically swing back to their favor. Intraday trading is definitely not recommended for this pair; because, the quick price changes of this pair necessitate a scalping attitude a good deal of the time. For some this is not a problem, but for others who like to make a trade and walk away this can be an extremely costly pair. This pair is influenced by central bank policy decisions with regard to interest rate and other factors.

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james smith has 172 articles online and 1 fans

The author is a Forex trader and financial analyst residing in Denver, Colorado.  To stay up to date on all the latest developments in the financial world and beyond be sure to stay up to date with the latest forex quotes.

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This article was published on 2011/09/26