Japanese Yen (JPY) is one of the most traded seven currencies in world forex market. It is also the signature currency of Asian countries and forms some very popular currency pairs like USD/JPY, EUR/JPY, GBP/JPY, CHF/JPY and AUD/JPY. There are many things that differentiate trading Japanese Yen from trading other major currencies.
  • Contradict to most other nations; Japan is experiencing really low or no inflation. Actually there are many phases of deflation in recent pasts.
  • Japan also has a very low economic growth rate. To boost the growth Bank of Japan has kept rates to really-low levels and some times slightly negative rates were in effect.
  • Although many heavy-metal industries were migrated to other countries, Japan still is a leading exporter of electronic, automobile and technology products and have a very well educated workforce. Japan has a high trade surplus.
  • As the interests rates are very low compared to other currencies, JPY is a very good candidate for currency carry trades, where the trader profits from interest-rate differences of two currency pairs.
  • JPY is also a good backup currency for many nations because of its stability compared to other currencies. Although Japan has very high debit levels it is nullified by the facts that most of these debits are domestically owned and Japan has very high trade surplus.

This blog is written for Orient Financial Brokers UAE, a Dubai based online forex trading brokerage firm offering web based trading platform and a range of account features for traders from middle-east.