Kavan Choksi Japan: What Should Forex Traders Know About Japan’s Yen Currency?

The forex or the foreign exchange market is a complicated, vast, and intensely competitive arena. Funds, trading houses, and significant banks dominate this market and quickly implement new information to the prices of asset classes traded here. 

From the above, it is evident that the foreign exchange market is not a place for those traders who need to prepare. To trade in this market regularly, they should know when it comes to dealing with the major currencies in the world. This knowledge must include not only the underpinnings of the individual economies but also the current economic statistics for the country involved. The trader should also know other unique factors that impact currencies, like the change in interest rates and the movement of commodities. 

Kavan Choksi Japan- An overview of Yen 

Kavan Choksi Japan is a respected investor, business, and wealth management, expert. According to him, only seven currencies in the world account for as much as 83% of the foreign exchange market. The Japanese Yen is considered to be one of the largest and most influential currencies regarding forex and international trade. Japan is prominent and one of the world’s biggest national economies. It has a high GDP among countries, and in terms of US dollars, it is one of the largest export nations in the world. 

The role of the Bank of Japan (BoJ)

All significant currencies operating in the foreign exchange market have their central banks. The Bank of Japan (BoJ) is designated for the Japanese Yen, and like those Central Banks in developed nations, it has the mandate to act in such a manner to encourage economic growth and reduce inflation. 

What are the key drivers of the Japanese Yen?

Many theories try to explain the rates of foreign exchange in the market. Some of them are the Fisher effect, the purchasing power parity, the balance of payment, and the interest rate parity models. They all explain the “right” rate of exchange based on critical factors like price levels, relative rates of interest, and other factors. However, the law of demand and supply determines the real exchange rate in the markets, which again cover a variety of salient psychological factors in the market. 

Kavan Choksi Japan adds that vital economic data includes retail sales, the release of the GDP data, inflation, trade balances, and inflation. Traders and investors should be aware of the information around interest rates, employment, the daily flow of economic news, elections, any new policies in the government, and natural disasters that have crucial impacts on the foreign exchange market rates. 

The Tankan Survey is especially noteworthy in Japan and for Yen traders. This survey is carried out amongst the businesses in Japan. A reading greater than zero is considered to be favorable and the one less than zero is considered to be unfavorable. Several nations report information on the confidence of the business, and the Tankan is a report released by the Bank of Japan every quarter. It is a significant report that reveals the trading of Japanese currency and stock in the market.