When it comes to currency pairings, one that has certainly been capturing the interest of forex followers everywhere of late is the Japanese yen, US dollar couple.
In recent times, the yen has been seen as something of a safe haven currency. This is mainly because of the policies of Shinzo Abe as Japanese leader, which concerned keeping the value of the yen low against other world currencies so that Japan could compete in terms of exports. Abe’s attempts at making export driven growth the driver in Japan’s economy do seem to have been working, however volatility in other currencies can see the yen rise from time to time.
Yen Up Against the Dollar
In the past week, we have seen unusually high rates for the Japanese yen against the US dollar. For currency watchers, this is an interesting trend. When studying forex trading one normally takes the US dollar as the major currency all others are measured against. From an analytical point of view, this makes the movements against the dollar for the yen especially interesting. The yen has been a good prospect for investors this week when compared to US dollars, and it may well continue its positive performance.
Investing in Exotic Currencies
In forex, some pairs are considered major, and others less significant and riskier. The USD JPY pair is one that would usually be considered a ‘minor’ pair in forex terms, because the dollar is seen as one of the world’s most important currencies, and the yen is significant globally even though Japan’s position isn’t perceived as being as strong. However, for investors who are keyed in to the Asian markets, following currencies like the yen can pay off. It can be harder to follow the news and anticipate socio-economic events that will affect the currencies in Asia, but investing in them can be a great idea.
Japan has seen a lot of currency volatility purely because its currency has been thought of as a safe haven. Where some invest in gold or other precious metals and others still invest in bitcoin, the yen has been the safe haven of choice for many investors especially in consideration of the North Korea crisis, which is causing instability in Asia, While investors all have their own reasons for buying in to the yen, it is working out to give the Japanese currency a big boost against the dollar, which has been a little weak lately on the Asian markets.
If you are looking for an interesting currency pair, the yen may not be a currency you have thought about including in your trading lately. However, those who invested in the yen against the American dollar have seen some positive results this week. It is perhaps a sign that we should look to the Asian markets more when constructing our pairings, and take advantage of times like these when volatile conditions for the dollar allow the yen to make significant gains.