How to Make a Profit on USD/JPY?

Posted by OliverPearson 0

usd-jpy

USD/JPY, also called by some traders as “gopher”, is one of the seven majors.

The relationship between USD/JPY shows how many Japanese yens are required to buy the U.S. dollar.

USD/JPY is the second most traded currency pair.

This is explained by high liquidity because the U.S. dollar is the top reserve currency, and yen is the world’s fourth reserve currency.

Factors influencing the USD/JPY rate:

  • key interest rates
  • – decisions of the Fed
  • Japanese banks performance
  • – the Federal Reserve System measures to strengthen the U.S. dollar
  • – Foreign exchange market interventions
  • – Tokyo Stock Exchange performance

 

Besides, difference in time zones contributes to trading volume fluctuations. For instance, trading volumes increase during the period of 10:00 a.m. to 8:00 p.m. (GMT).

This currency pair shows the most significant fluctuations during the Asian trading hours when the rate depends largely on Japan.

Smaller fluctuations are observed during the European trading hours when the currency pair’s behavior chiefly leans on the U.S. dollar.

To trade USD/JPY is not so difficult as it may seem at first. The most important is to know what can have an impact on USD/JPY.

Analysis of the USD/JPY currency pair

The JPY rate depends mainly on the Bank of Japan decisions. The strongest fluctuations of the rate are typically caused by currency intervention.  This measure aims to weaken the yen because decrease in the rate allows Japanese goods to compete on the global market.  

The U.S. politicians’ announcements regarding restrictions on the Japanese product import also have a considerable impact on the exchange rate. Implementation of new duties and restrictions causes yen sharp decline.

Japan’s Ministry of Finance announcements are also a strong indicator, that’s why you should follow the official statements related to the current economic situation and forecasts. They influence the rate of the Japanese currency as they are a kind of verbal intervention intended to prevent appreciation of the USD/JPY currency pair. The officials make statements fairly often.

One of the important economic factors influencing the price of yen as well as other currencies is GDP. The indicator is a total cost of all services and products manufactured in a certain country.  Rise in Gross domestic product causes the yen to rise.

Foreign trade having a significant impact on the country’s GDP is of paramount importance. Increase in foreign trade is a positive factor for yen.

Besides, unemployment rate, one of the key indicators for the Japanese economy, carries weight. Industrial production is of great significance for Japan’s economy as well.

From the American side, this instrument is influenced by the same factors as other currency pairs containing the U.S. dollar. They include economic and political news reports, GDP, unemployment rate, internalpolitical events etc. All these reports are released at different intervals. The GDP report is published monthly. Political events, accidents, and disasters are covered in the news reports when they emerge.

Speaking about disasters, Japan is exposed to this factor due to its geographical position that’s why a trader should always have in mind typhoons, tsunami, and earthquakes.

 

How to make a profit on USD/JPY

USD-JPYThe best way of making a high fast profit on USD/JPY is binary options trading. All you need to do is to analyze the currency pair and forecast the price direction.

For instance, if you buy an option for 10 minutes, you need to forecast the price level after 10 minutes, that is, whether it will rise or drop. All types of binary options have such an underlying security as USD/JPY.

Even if the price changes by 0.001 in line with your forecast, you get a 70% to 80% profit.

For example, I advise you to trade with AnyOption. This is a modern, reliable, and nice broker providing a great number of underlying securities.

  • 1. I browsed the broker’s website.
  • 2. I chose USD/JPY as an underlying security.
  • 3. I set the time of expiration to 5:00 p.m.
  • 4. I typed the amount of investment
  • 5. And I clicked on PUT expecting the price to fall:

usd-jpy trading
 

After 17 minutes, the option expired. As the chart shows, the U.S. dollar go down, and I got an 80% profit!

trading usd-jpy
 

I made an 80% return or $112 in just 17 minutes.

Analyze the USD/JPY currency pair, and make a profit with AnyOption!

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