Trading with USD to JPY is particularly interesting in the foreign exchange market at the moment. The dips and rises in the yen are fairly predictable since the Japanese Central bank intervened last year to lower the value of the yen.
Although this may sound like a strange thing for the BOJ to do, it makes absolute sense in a country that is dependent on raw materials from elsewhere, and whose main source of revenue is export dollars generated through the sale of manufactured goods.
Although Japanese technology is long-since not considered to be the ‘Jap Junk’ of the sixties and seventies – in fact it’s now esteemed as high quality manufacturing – there’s a limit to the price one can command on the export market. Of course, central bank intervention isn’t going to change the fact that Japan is a major manufacturing nation that brings in billions of dollars in export revenue and contributes to a healthy trade surplus, so the price of yen in the forex market tends to rise over time.
Despite the yen’s dips and rises, the trend over twelve months is a steady rise despite blips at fairly predictable intervals. The blips look fairly predictable, so speculators are keen to ride the wave, buying during the dips and selling during the rises. These are startlingly frequent, and savvy traders have walked off with substantial profits in a matter of days. It is well worth looking at USDJPY live forex charts and graphs over time to see short and long term trends.
On a short term speculation, the trick would be to estimate the dips and rises with in as little as two to four days. However, if you mistime it, there may not be need for despair: you could catch the next peak in a matter few days, even hours, or wait it out to see if the steady growth trend in the forex market is likely to continue.
January to July sees the JPY fluctuating around a median range. How long this will continue, is a matter for speculation. If the BOJ has found the perfect balance: affordable resources and strong exports – it seems likely that it will devise strategies to keep the currency fluctuating within a predictable range over time.
This said, the five year picture sees the yen clawing its way back to its 2008 prominence unless the BOJ intervenes once again owing to export pricing needs. Another interesting move was to make the borrowing of yen interest free. This allows for the purchasing of other currencies with borrowed, interest free yen, and potential profits: an interesting scenario in forex tradingto say the least!
Predictions are that the JPY is set to embark on another minor fall this week, beginning today, so it will be interesting to see if the forex trading strategy of selling USDJPY on Wednesday with subsequent profit-taking is likely to bear fruit.
Free forex charts and graphs will help you to monitor what’s going on. They’re updated regularly, so the information is pretty up to the minute! Remember to be on the alert during forex trading hoursand get a forex trading robot or some other automatic forex trading system in placeso that you don’t miss out.