It looks like the Japanese yen is ready to find fresh upward momentum. This comes after the Bank of Japan Governor Haruhiko Kuroda stated that the central bank would need to act decisively in order to keep to its goal of a 2 percent rate of inflation. The usage of many different policy options was also alluded to, indicating that the yen would be buoyed upward at the sake of the stock market. This has driven many Japanese stocks down in price as the Bank of Japan is seeing more favor than the stock market is.
This is a common occurrence, and it sets the stage for a strong day of binary options trading if you can detect these things early. One of the great strengths that U.S. traders have is the fact that trading has already occurred for the day in Asia and it’s already well underway in Europe. While past events aren’t always indicators of the future, they can be very helpful for gauging what trader sentiment is, and this is a key component of your success when it comes to short term trading.
And when it comes to the U.S. dollar/Japanese yen pair, this is valuable information. Already on Friday morning, just hours after the BoJ made this announcement, the USD/JPY was up by 0.087 percent, a large jump when you take into consideration that these are two of the strongest and most reliable currencies in the world. The yen is gaining momentum, and it is coming at the sake of even the U.S. dollar. At the time of writing this, the USD/JPY stood at 109.2050, and that’s after large gains had already been made at the beginning of the month of May.
To be fair, the yen has dropped off quite a bit over the course of the last 30 days, and this could be a bounce up in reaction to that. The dollar/yen pair is coming off of a high up near 112.0, and this upward momentum that it’s now seeing isn’t yet putting it close to that point. There were large drops at the end of April as the dollar gained strength thanks to a weakening U.S. stock market. For the time being, the U.S. dollar and the U.S. stock market are both looking weak right now, though. At least compared to the Japanese market. This is a good time for international investors to make their moves because it is a rare moment when the dollar and the major indices are all moving in a bearish manner.
It’s also important to keep in mind that the U.S. dollar is moving strongly against other currencies. The yen is just in such a position of strength that the dollar’s gains elsewhere are eclipsed by it. For example, there are advantages for Japanese traders that are not present for European traders. The EUR/USD has dropped from a high of up over 1.15 to 1.1304 over the last two weeks. The yen’s upward momentum is not nearly as big as the downward momentum that the euro has seen against the same currency. Binary options traders need to be aware of these types of things. Even if you don’t typically focus on the euro at all, the data is just too strong to avoid trading here. As long as you time your trades correctly, a lot of the data is easily transferable, allowing traders with only minimal knowledge of the euro and how it behaves to create a series of profitable trades while this scenario exists. If you find yourself in this camp, just be aware of the warning signs for when the window of opportunity has ended.