Currency JPY Role In Forex Day Trading PDF Print E-mail
Written by Bob Forex   
Monday, 27 September 2010 15:14
EUR JPY pair is major pair traded on forex market. Yet in period of tiny or no economic news in Europe and Japan, the EUR JPY currency pair still attracts great number of traders.
by BobForex


EUR JPY pair is major pair traded on forex market. Yet in period of tiny or no economic news in Europe and Japan, the EUR JPY currency pair still attracts great number of traders.

Europe monetary state both actual and perceived has a vast influence on EUR pairs particularly in EUR JPY pair. Since EUR has a number of European countries in the EUR, anytime there is news both fine and awful the EUR is affected. In the case wherever Greece has a trouble in obtaining loans, the EUR JPY currency pair dropped sharply. It was only while the news reported the problem to be partly fixed did the EUR JPY pair trend stabilised.

Japan economy has been very much different to European, United States and Australian economies. Japanese economy influences the perceived worth of Yen and hence affects the price of each YEN currency pair. Japanese economy appears to be lagging behind European and US economies and sometimes it is in front. Of the late it was almost not possible to find the JPY economy to be in the similar trend as EUR.

Size of Japanese market is also crucial. When US has a recession, the Japanese imports drop. This leads to Yen taking a dive on the forex markets. Still there is no apparent correlation between Japan economy and price of Yen. Fundamentals of Japan economy do not automatically transmute in price of Yen. Quite often Yen price is driven by traders expecting movement which may not be justified. This artificial sort trend can be stronger than underlying reality of the economy.

Having sound information of fundamentals of countries who's economy the trader is interested in as well as short term trend yields a sound basis to make a decent conclusion of how to trade these currency pairs.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Learn more about forex day trading. Stop by Bob Forex's site where you can find out all about currency JPY.