By James McKee – For the past several years the Japanese economy has suffered and as a result the country’s currency has seen an undesired surge in value. Typically an economy (such as that in the US) enjoys a currency with high value, but when that country is chiefly an exporter such as Japan it only makes exports more expensive for other countries. Japan’s stock recently shot up in value considerably causing the Japanese Yen to also make gains in the Forex currency exchange against the US dollar. While the stock market increase is good for Japan the increase in currency value is certainly undesired.
Being one of the world’s largest exporters and being a “western” nation makes the Japanese Yen unusual in the major currency pair world. Its GDP and export levels are all excellent indicators for Forex traders to keep in mind and a great way to profit consistently. Lately however the Japanese Yen has been rising in value despite efforts by the Bank of Japan to devalue the currency, the currency will continue to rise and fall through its cental bank’s efforts which makes it appetizing for traders. The Japanese Yen will be unstable for the foreseeable future and should be approached with caution (much like the USD) by traders.
Indeed there is a reason the Japanese Yen is the third most traded currency in the world, a lack of stability will always be profitable to a good trader. Fortunes are won and lost on the Forex currency exchange with the Japanese Yen all the time. Utilizing pivot points, having solid stop loss and take profit values is especially important no matter what currency you pair with the Yen. Since the G20 summit China (who has close economic ties to Japan) has openly stated a renewed dedication to stabilize their own currency. What this means for the Japanese Yen is anyone’s guess.
About the Author
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 check out the forex exchange rates regularly.
