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AUD / JPY (Australian Dollar / Japanese Yen)

How can you trade the AUD/JPY?

To ensure that you are taking advantage of the best trading conditions, there are three aspects you should consider.

First, though the global market operates 24 hours a day, 5 days a week, you need to find out the best time to trade this asset. Timing is further a question of closely monitoring the release dates of any important economic events that may greatly impact the AUD/JPY.

Then, there is the matter of volatility. To avoid high costs and manage your risk while trading, it is advised that you open your trades when the volatility is around the average range.


Lastly, it is best to consider using limit orders and not market orders as the last add additional costs and raise slippage. Trading using limit orders reduces the slippage to zero as well as the costs.

What factors influence the AUD/JPY?

Japan and Australia are located in similar time zones, and so their respective currencies are affected at the same time. On the plus side, these currencies are easy to track with regular updates from each country.

The Australian dollar is susceptible to change in market value due to interest rate changes and the monthly employment report. The Japanese yen, however, is impacted by Japan’s unemployment rates, balance of trade, and consumer confidence.

The currencies are also affected by the countries’ balance of trade, which is measured by how much goods a country provides to other countries. Japan is the fourth biggest supplier, whereas Australia comes in at 24.

What to consider when trading the AUD/JPY?

If you are looking for short term gains, this currency pair offers excellent opportunities to make a profit as even a small fluctuation can result in a significant return.

Those traders who are already heavily invested in currency pairs should consider diversifying and minimizing their risk by adding the AUD/JPY pair to their trading portfolio.

Last but not least, Australia and Japan are considered the strongest of the eastern markets, and both countries are advanced and enjoy political stability. However, both suffer from serious financial issues. Australia is $6 trillion dollars in debt due to government programs and social obligations. Japan, on the contrary, has been accused of establishing zombie banks (i.e.- banks with no money in them) to receive charity from central banks and loans from the government.

 

Did you know?

The name of Japan’s official currency derives from the word meaning ’round’, and it borrows its phonetic reading from the Chinese word yuan and the Korean, both north and south, won.
The yen is the third most traded currency in the global market and is the fourth widely used reserve currency.