The Dollar-Yen rate finally bottomed out at around
XE International Money Transfers
The Yen was perpetually weak during the first part of the s. Then, the Japanese stock market crashed in , kicking off years of deflation. From to , the Bank of Japan intervened in the market dozens of times to weaken the Yen, as they feared a strong Yen would prevent economic recovery. But the intervention only worked in the short term. The financial crisis of brought additional strength to the Yen as investors began to view it as a safe-haven currency.
The Dollar-Yen rate finally bottomed out at around It has, however, remained below levels seen in the s and s. The Dollar-Yen rate will fluctuate based on the prices of imports and exports. But as one of the most industrialized nations in the world, Japan is also dependent on imports of commodities such as crude oil. The low interest rates in Japan have made the Yen extremely popular as a carry trade, so traders often sell the Yen to buy higher yielding currencies.
This frequent selling of the Yen has kept its value low. This makes it popular among traders because it often has a low bid-ask spread, and high liquidity. And with such a high volume of trades, it can be extremely volatile, which creates a range of exciting opportunities for traders to take advantage of rising and falling markets.
When you see the price increasing on the chart, it could mean one of three things. It could mean that the US Dollar is strengthening, that the Yen is weakening, or that both are happening simultaneously.
Whether you look at price patterns or fundamental news events, the chart can give you a sense of current trends. Find out the fundamentals that look likely to drive future price action. In truth the Bank of Japan was never very likely to step in to knock its currency back down Continue Reading.
But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment.
Choppy Range Belies Bearish Bias. The pair is often called 'The Cable', as the first transatlantic communication cable run across the floor of the Atlantic, connecting Great Britain with The United States, was used to transmit currency prices between the two economies. E-Mail Please enter valid email. Phone Number Please fill out this field. Country Please Select Please select a country.
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