The U.S. dollar yen -usd yen writing, USD / YEN in the forex market - after the euro-dollar and the pound U.S. dollar the most liquid currency pair in the currency market. Because the Japanese central bank regularly exchange rate of the yen is trying to influence the forex and Japan also (at time of writing) the world's second economy, the dollar Yen also one of the more volatile currency pairs .
The value of the yen against the U.S. dollar is expressed as a certain number of Japanese yen against $ 1. When the price of yen U.S. dollars 91.81 for example notes, this means that $ 1 is currently worth 91.81 yen.
The value of the yen and the Japanese economy
The Japanese economy is a real export economy . Japan exports more than $ 500 billion annually , which is about 10% of the Gross Domestic Product is. It is the industrial production that the great engine of the Japanese economy (manufacturing). Because Japan as an exporting country always trade surplus has (more exports than imports), there is an inherent demand for the yen, because, after all goods purchased must be paid. At the same time, Japan has an interest in the value of the yen remains low relative to other currencies, since it stimulates exports.
Until the mid 80's the Japanese economy grew rapidly, by about 10% on average in the 60, 5% in the seventies and 4% in 80 years. Japan was one of the most attractive countries to invest in and considered a ' gateway to Asia ". This also developed the Japanese financial sector is rapidly, what then caused the money market strongly expanded, creating a real estate bubble was created. When this bubble collapsed, the same thing happened with the banking sector, which is in over his head in it. (Various economists believe that China is on the same path)
Huge amounts of " bad debt ", a sharply declining stock market and real estate sector ineengestortte the Japanese economy since then problems concerned. What once " the lost decade "was named for the Japanese economy, the financial crisis threatens' The lost decades "to be.
The Japanese bank and the ministry of finance
The Japanese central bank (Bank of Japan, BOJ) and the Japanese ministry of finance is responsible for monetary policy of Japan. Because Japan is an export economy, the interest in a cheap currency, and in the past, the BOJ intervened several times when it ruled that the yen was too expensive relative to the dollar . The Bank of Japan is so much more active than the other major central banks like the Fed, the European Central Bank (ECB) and Bank of England (BOE).
The price of the USD YEN in 2002 reached a height of 1.35 but has since been greatly reduced in value. At the time of writing the record 91.80 usd. The yen is already so weak in this period of himself, so the BOJ does not need to intervene.
Historically, it appears the Japanese central bank intervene in the forex when the USD / YEN more than 6 or 7 yen moves in less than six weeks, a movement of 700 pips so.
Where forex traders should watch out for the USD / JPY
The yen is widely used as a vehicle for the carry trade . Here is a currency with low interest rates plotted as a high rate. Because the Japanese yen for years an interest rate of almost 0% and it is highly unlikely that in the short (or even medium-long) term is going to change, this makes the yen to an ideal low interest rate currency . When the traditional "high-interest currencies, interest rates continued their increase, the carry trade popularity, which will push the yen. Conversely, many carry trades are unwound (closed position) when the high interest rates just lower their currency, carry trade is less popular after all.
Investors, investors and forex traders love the banking sectors of all the rich countries at the time a close eye, because that it where the financial crisis began, and that's where the blows fall as the Sovereign debt crisis is spreading. It is even more true for Japan, as well as' The lost decade "for a large part was caused by. In other words, movements in the shares of Japanese banks may have a direct impact on the price of Japanese yen (and that often).
Japanese Yen currency pairs with it and certainly the usd jpy, toward the end of the Japanese fiscal year (March 31) is often active. Related regulations are frequently exporters repatriate their dollar assets. This increases the demand for the yen temporarily. Forex traders often reinforce this process even further by going long on the yen, to take advantage of the positive effect on the yen from the end of the Japanese fiscal year.
Key economic figures for the USD JPY is also: Japan's GDP, trade balance (trade balance) employment rates and figures on industrial production. Finally, of course, all the important economic data from the U.S. affects the currency pair USD / JPY.
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