Forex Trading: The USD/JPY Forex Currency Pair
When you trade in the forex market, you buy or sell in currency pairs. These pairs are divided into Major Currency Pairs, Cross-Currency Pairs & Exotic Currency Pairs. The major pairs are the most liquid and widely traded currency pairs.
In terms of trading volume, the USD/JPY is one of the most popular traded currency pairs. Based on BIS Triennial Central Bank Survey 2016, EUR/USD are responsible for 23.1% & USD/JPY 17.8% of total OTC foreign exchange turnover.
A the time of writing, the high / low price for the month for USD/JPY was 114.95 and 111.59, this means that USD/JPY had moved 336 pips on this month, and looking back to the last 3 month, the movement was: January 2017: 653 pips December 2016: 578 pips, November 2016: 1334 pips. This suggests that the currency pair is a volatile currency which day traders prefer, as they make/lose money when the market moves.
Influences of the USD/JPY Currency Pair
Factors that influence the currency pair include: economic climate, political issues that happen in USA & Japan. Because USD/JPY is known as a safe haven pair, they are affected by political & economical issues of other major countries, like what happened with Brexit on June 2016, the USD/JPY moved over 1180 pips as a results of political decisions in the UK.
In 2017, potential influences of the currency pair include:
- Economic reports such as Interest rate & unemployment rate for Japan and the US
- Political issues like President Trump’s policies, and when the UK will reach the Article 50 for Brexit in March 2017
How To Trade the USD/JPY Currency Pair
Traders with smaller account sizes, trading Forex using an online forex broker is one of the most popular methods. With a forex broker like AvaTrade, you will be able to maximize a smaller account size using leverage up to 1:400 and get access to over 60 forex pairs. With a broker like AvaTrade, traders receive the added benefit of charting & news feeds, education on money management and how to trade.
AvaTrade also offer their clients various platforms to choose from including the popular MT4 platform.
The Trading conditions available for some of the major pairs with AvaTrade are:
| Instrument | Min Spread (Pips) | Typical Spread* (Pips) | Leverage | Margin | Minimum Trade |
|---|---|---|---|---|---|
| USD/JPY | 0.9 | 1.7 | 400:1 | 0.25% | 0.01 lot |
| EUR/USD | 1.0 | 1.8 | 400:1 | 0.25% | 0.01 lot |
| GBP/USD | 1.8 | 3.1 | 400:1 | 0.25% | 0.01 lot |
*All information collected from www.avatrade.com, see website for full terms and conditions. Your capital is at risk. Last updated on March 6th, 2017.
