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Forex Currency Pairs

Forex pairs: US Dollar and the Japanese Yen

USD / JPY which stands for the US dollar / Japanese Yen is said to be the one and only major forex currency pair having an Asian currency. Japan has an export-driven economy from a very long time in history. The Bank of Japan acts as a central figure which plays an active role in regulating the value of their currency i.e. the Yen. The bank is said to intervene enough to make sure that the value of Yen remains weak and thus very conducive to sustain an economy based on exports.

The abbreviation USD / JPY that stands for the currency pair of U.S. dollar together with Japanese Yen indicates the amount of Japanese Yen, that is, the quote currency which is required in order to purchase a single U.S. dollar which is the base currency. To illustrate this let us take an example. If a USD / JPY forex currency pair is being traded at an exchange rate of 1.50, it means that 1.5 yen is required to purchase 1 unit of U.S. dollar.

The USD / JPY forex pair is affected by many factors. Due to this, the difference between the interest rates of Bank of Japan and the Federal Reserve Bank (Fed) affect in turn the value of both of these currencies. For instance, when the Fed tries to intervene in activities of the open market, it makes the value of U.S. dollar stronger. This may result in the increased value of USD / JPY cross currency pair.

“Gopher” is also a special name that is used for trading of USD / JPY forex currency pair. The USD / JPY is also likely to have a very positive correlation with currency pairs of USD / CAD and USD / CAF as in all these currency, the U.S. dollar has been taken as the base currency. One amazing fact about this forex pair is that the USD / JPY forex pair is the second most traded forex currency pair throughout the world. Although between 2004 and 2007, the turn over of share of the dollar as well as yen has decreased, but still, this pair has been amongst the top most traded pairs in the forex market.

In Forex trade market, the volume of trade of USD / JPY is so high that people generally regard them as safer to trade. The massive volume ensures easy to find a buyer or seller. The starters in this field also find it easy to start with this forex currency pair. Many different internet webpages are available that can even assist one with the probable forecast that the USD / JPY forex pair is about to have. These days with availability of internet, it has become all the more safer, easier and faster to do trading of USD / JPY forex pairs.

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