USD/JPY Pair

There has been a significant change in the marketing scenario in Forex trading. It has seen a huge rise from a benchmark to reaching new heights. It has crossed its benchmark every time.

The US dollar has set a standard in the Forex trading market where most people love to trade USD and consider it the most valuable currency. In such situations, one of the prominent currency pairs is USD / JPY. USD vs JPY currency pair  on profit swiss means comparing 1 value of US Dollar against the equivalent amount of the Japanese Yen. Japanese Yen over here is the quote currency and the US dollar being the Base currency, is one of the popular trading currency pairs. Let us make this concept clear with a simple example. Say the pair has a trading rate of 200. This means that the exchange of 1 US dollar can be done with 200 Japanese Yen.

Japanese Yen is widely used as a currency for reserve, and hence the exchange rate of the pair USD/JPY is one of the most liquid pairs in the market of Forex traders, and they are traded widely in the global forex market. This currency pair is usually affected by certain factors like the difference in the interest rate between the BOJ (Bank of Japan) and the FED (Federal Reserve). This comparison can affect the USD/JPY pair rates as well as their relationship with other currency pairs. When there is an intervention on the part of the FED to glorify USD as the strongest currency and help the USD attain the stature, then the currency pair USD/JPY is likely to increase rapidly. This happens because the US Dollar strengthens much more than the Japanese Yen.

There are multiple struggles associated with the economy of Japan in the 21st century, but in spite of such conditions, the Japanese Yen is one of the safe-haven assets. This means that in vulnerable market situations, investors tend to shift to the Japanese Yen for safeguarding their situation. This situation was clearly visualised during the time of the Great Recession when the trading reduced from 120 yen in 2007 to 90 yen in 2009. The global economy strengthens to weaken the Japanese yen. During good times when stock markets are moving high up, the value of the Japanese yen drops. There were huge drops in JPY during the time after the recession.

There has been a positive correlation between the USD/JPY and the USD/CHF currency pairs because they both have USD as their common base currency and the fact that Swiss currency CHF is also a safe haven asset like the JPY and investors rely on them during hard times. The co-relationship is negative for USD/JPY and gold. During the crisis, the prices of gold rose, and the exchange rates dropped significantly.  So, trading the currency USD/JPY is quite useful, and you can easily rely on such a safe haven currency, JPY, for investing. Best of luck!

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