The US is one of the drivers of the world economy, and since the end of the 20th Century Japan have taken on great significance on the world stage. With two companies of such important economic significance there is naturally a lot of interest from forex binary options traders.
Japan has gained massive credibility as a manufacturing and export company through brands such as Toyota automobiles and Toshiba electronics. Add to this companies like Cannon and you have an impressive suite of companies based in Japan. Japan has suffered from deflation over the years, which has impacted the growth of consumerism and made the nation over-reliant on export income. Major trade partners such as Europe, China and the US have a dramatic impact on their economy. In 2012, Eurozone weakness, disputes with China and US problems meant the economy suffered. There have been many trading opportunities with the USD, and a 10% drop in trading USD-YEN in the fourth quarter of 2012.
The Japanese Central Bank has a history of intervening to actually keep the YEN weak. A weak YEN helps with exports through increasingly competitive pricing around the world. Traders should therefore be wary of Central Bank announcements. In addition, the Japanese economy is linked to the US by its important trade relationships. A weak US will normally deflate the Japanese economy.
The USD/YEN currency pair relationship is certainly complex, and fraught with difficulties for a trader. It is generally recommended that only more experienced Forex traders opt to trade in this currency pairing. The volatility provides opportunity but beware of unforeseen influences.