An In-Depth Look At The Japanese Yen In Forex

By James McKee

Japan has a very respectable position in the world’s economy as possessing the world’s third largest GDP. This gives Japan the predominant identity of an exporting nation, which it is. Any rise in the value of the Yen makes Japanese exports less appetizing to importing nations because those imports become more expensive. The bank of Japan has recently been making large efforts to reduce the value of its currency wherever possible in an effort to boost export rates. Forex exchange traders have been watching the bank of Japan issues a semi annual report in April and October that detail their upcoming predictions with regard to several possible developments for the Yen.

The overall Outlook Report makes predictions about where the interest rate is headed and speculates on the overall GDP of the country for the upcoming 6 months. The CPI is the consumer price index or the price increase experienced by consumers. Industrial production refers to the overall number of products produced in factories in the country. Increased levels of production indicate a growing economy, while a decrease indicates a possible slowdown for that economy. The Japanese economy overall has suffered tremendous problems in regard to its currency increasing in value and as a result has suffered a decreased rate of exports.

Japan is responsible for many of the world’s high tech innovations including hybrid cars, advanced computers and electronics and many other items. Due to this the Japanese Yen is incredibly vital within the Forex market. Its inherent sensitivity with regard to import/export levels fluctuating makes the Japanese Yen a great currency to pair. The bank of Japan’s recent intervention measures have been clear indicators to Forex traders that it is time to examine the currency closely and pair it a stable currency such as the Canadian Dollar. Happy Trading!

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.