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A Risk Averse Japanese Market

If Headstart FX Academy looks back this past trading week, the Japanese yen was one of the strongest currencies – what can we learn from this? We can  learn that when traders are more risk averse they are encouraged to stick to safer assets and to steer clear from trading on riskier trades.

If Headstart FX Academy looks back this past trading week, the Japanese yen was one of the strongest currencies – what can we learn from this? We can  learn that when traders are more risk averse they are encouraged to stick to safer assets and to steer clear from trading on riskier trades.

In times of fear and uncertainty, the Yen is a safe harbour for investors to seek.

Headstart mentors will always teach us to look at current events and their effect on currencies around the world. This week the spotlight was on North Korea as tensions between North Korea and the United States increased. Investors were also looking at the darkening skies around relationships between Russia and the United States. In fear and uncertainty, the Yen is a safe harbour for investors to seek – investing in this more steady currency as the dollar is affected by political uncertainty and tensions between nations. AS forex traders we need to take the temperature of world uncertainty and to look to more steady currencies in torrid, uncertain times.

Once considered to be considered a ‘safe harbour’ currency, the dollar is now underperforming compared to the yen as the US hangs back from getting involved in conflicts, which has proven to discourage investors from buying dollars. A key know to the dollar was US President Donald Trump recent statement that the dollar was oo strong a currency.

This week, USD/JPY plummeted 2.3% from 111.05 to 108.54 – the lowest weekly close since November. EUR/JPY slumped 1.6% from 11.7.58 to 115.70 – also the weakest close since November. GBP/JPY declines from 137.51 to 135.89.

Have any questions regarding the Japanese Yen and how to trade in it, sign up for one of our Headstart FX Academy Courses and enjoy the close supervision of one of our trading mentors.