Know about the Gopher:
In this pair, the dollar is the base and the Yen is the quote currency. In other words, the USD/JPY value tells you how many JPY the trader must pay to buy a USD. Since binary options trading is ruled by statistical trends, binary traders in South Africa should be aware of the trends and ranges in the pair to correctly predict which way the price will move.
There are several factors that affect this exchange rate:
- The Economies: Of course, the two economies have a role to play. A stronger economy means higher interest rates that attract more foreign investment. The demand for local currencies (USD and JPY respectively) will go up and the USD/JPY value will be affected accordingly. On the flip side, if the economies are weak, they will affect the currencies negatively.
- Central bank action: If the currency is undervalued or overvalued, the Bank of Japan and the Federal Reserve will take intervening action. For instance, if the Federal Reserve sets an interest rate to strengthen the USD, the USD/JPY is likely to rise.
- Japanese import-export balance: Japan’s economy depends heavily on its imports and exports. It’s a good idea for binary traders to keep an eye out on Japanese import-export news, or disturbing events that could instigate the Bank of Japan to take intervening action.
- Natural disasters in Japan: The economy of Japan is vulnerable to natural disasters because of its geography. Don’t forget to factor this into your analysis.
- The relative growth of the USD/Yen: The Yen generally has a slower growth compared the USD, because of the Japanese economy’s long period of stagnation.
Trade during Asian market hours:
Not all 24 hours are worthwhile for binary trading in most currency pairs, though the dollar/yen pair is somewhat an odd pair in this regard. It sees some activity throughout the day.
But for traders in South Africa who want to be most efficient, the best time to trade in the USD-JPY pair is when there is most action in the Asian markets. This is usually between 10 p.m. to 8 a.m. GMT (12 a.m. to 10 a.m. South Africa time). This is when you’re likely to find most binary options.