US Dollar/Japanese Yen: Upside pressure eased below 122.20


The US Dollar and Japanese Yen are currently in a strong inverse relationship with one another, meaning that when one strengthens, the other weakens. The Japanese Yen has become an attractive investment as it has dropped in value against the US Dollar over recent months. This article will explore how to trade this currency pair as well as its components – interest rates, political conditions etc.

What is the current value of JPY with respect to USD?

The Japanese Yen is the world’s second-largest currency after the US Dollar. The current value of JPY is approximately 121.91 USD. One important thing to note is that there are traders who believe the JPY will not only depreciate against the USD, but also against other major currencies such as the Euro and Pound. This means that if you think that a certain currency pair will increase in value, then you can invest in it by buying into USDJPY or another pair.

Will the price of JPY ever rise above USD?

The Japanese Yen is a precious metal, like gold and silver. It is part of the Japanese golden triangle, which consists of Yen, Gold and Silver. The Japanese government has been selling off their gold reserves to support the yen’s value. The main reason that the traders believe that the JPY may increase above USD is due to a recent rise in US interest rates.

If the US Federal Reserve raises rates more aggressively than expected by analysts, then this could force investors to move their money into other currencies, including the JPY (gold) which would make it more attractive than USD/JPY.

How can I spot potential trends or reversals?

The price of USD/JPY has behaved differently from any other currency pair in recent weeks. The USD/JPY’s trends are best spotted by drawing trend lines, arrows and supports and resistances.

What happens to the price of USD/JPY during political changes?

Politically, both Japan and the US are important global investors. If there is a change in leadership of either country, then this can affect the currency pair prices in different ways. In Japan, Shinzo Abe has recently introduced an economic strategy called Abenomics in order to boost the domestic economy.

There have been many reforms that have been put into place such as monetary easing, fiscal stimulus and structural reform measures. These kinds of policies have helped strengthen the Japanese Yen against other competing currencies over recent months. The price of USD/JPY has fluctuated as a result, as a stronger Yen is not beneficial to Japanese exporters.

What happens to the price of USD/JPY during economic changes?

One important aspect of trading currency pairs is understanding how economies influence the value of their respective currencies. The Japanese economy is currently reliant on exports, which makes them vulnerable to global trade conditions.

A slowdown in Asian countries’ manufacturing and exports can cause the Yen to depreciate against other major currencies such as the US Dollar, even if Japan’s own macroeconomic data is positive. One example occurred in 2011 when Japan’s second largest trading partner – China, experienced a slowdown in economic activity, which dampened economic growth prospects within Japan.

What are the key economic indicators?

Japan’s Central Bank, the BoJ, is currently in a ‘wait and see’ phase with respect to its monetary policy. They have not made any commitments on whether they will raise or lower interest rates and this uncertainty is reflected in USD/JPY prices.

Japan’s trade deficit shrank dramatically in February 2012, which was a reason for optimism that this would be followed by an improvement of their manufacturing activity. However, when Japan’s industrial output fell by 0.6% in March 2012, it signalled that Abenomics may be taking longer than expected to produce results.

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