HOW TO TRADE FOREX: AUSTRALIAN DOLLAR/JAPANESE YEN (AUDJPY)
The AUD/JPY pair combines two distinctly different economies: Australia, with its strong reliance on commodity exports, and Japan, an economic powerhouse with a unique monetary policy. This pair is particularly intriguing for traders due to its correlation with commodity markets and the global appetite for risk. Trading AUD/JPY requires an understanding of how commodity prices, especially iron and coal, can impact the Australian economy and, consequently, the value of the AUD.
Additionally, as the Japanese yen is often viewed as a safe-haven currency during times of economic uncertainty, the AUD/JPY pair can experience significant movements during periods of global market volatility. Traders must stay alert to shifts in market sentiment and use a balanced approach that combines technical analysis with a deep understanding of the fundamental factors affecting both currencies. With a careful strategy and a well-informed approach, the AUD/JPY offers valuable opportunities across a range of market conditions.
Top 10 Factors Affecting the Australian Dollar - Japanese Yen Pair
Interest Rate Differentials: The interest rate policies of the Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ) directly influence the movement of this pair.
Risk Appetite: Since the AUD is considered a riskier currency and the JPY a safe haven, global risk sentiment plays a crucial role in the AUD/JPY dynamics.
Commodity Prices: As a major exporter of natural resources, Australia is impacted by global commodity prices, affecting the AUD.
Japanese Economic and Monetary Policy: BoJ interventions and stimulus policies can weaken the yen, impacting the AUD/JPY pair.
Capital Flows: Investment movements between the Australian and Japanese stock and bond markets can cause fluctuations in this pair.
Economic Developments in China: Given China's role as Australia's major trading partner, any significant changes in the Chinese economy can affect the AUD.
Geopolitical Tensions: Geopolitical events, especially in the Asia-Pacific region, can influence the yen as a safe haven currency.
Key Economic Data: Inflation, GDP growth, and employment reports from Australia and Japan provide insights into the economic health of both countries.
Australia and Japan's Trade Balance: Changes in the trade balance can affect the demand for AUD and JPY.
Global Market Events: Financial crises, major central bank policy decisions, and shifts in global policies can significantly impact the AUD/JPY.
Related Assets Influencing the Dynamics of the AUD/JPY Pair
Gold Prices: Important for the AUD as Australia is a world leader in gold production. Increases in the price can strengthen the AUD against the JPY.
Japanese Government Bond Yields: Affect the JPY, as investors seek refuge in Japanese bonds during times of uncertainty, potentially strengthening the JPY.
Iron Prices: As a key exporter of iron, higher prices can benefit the AUD.
Copper Prices: Australia's role as a major copper exporter affects the AUD positively with higher prices.
ASX 200 Index: Represents the economic health of Australia and its strength can indicate a stronger AUD.
Nikkei 225 Index: A barometer of the Japanese economy; its performance can influence the value of the JPY against the AUD.
Top FX Trading Apps
Opening a FX Trading Account
Select a Reliable Broker: Research and choose a broker that meets your expectations regarding trading tools. The security of your funds should be your priority.
Registration: Go to the broker's website and find the option to register a new account. You will need to provide basic personal information, such as name, email address, phone number, and, in some cases, an ID document to verify your identity.
Account Verification: Brokers require a verification process to comply with anti-money laundering regulations. This usually involves uploading documents such as a photo ID and proof of address.
Initial Deposit: You can make your first deposit once your account is verified. Brokers offer different payment methods, including bank transfers, credit/debit cards, electronic payment systems, and even cryptocurrencies. Returning to point 1, if you have specific needs like "I can only use brokers that accept payment method XYZ, " choose the broker that fits your needs.
Trading Platform: With your account funded, you can now access the broker's platform. If you haven't already, now is the time to familiarise yourself with the platform. Take advantage of the demo account if it's available. It allows you to practice your trading strategies, an advantage not only for beginners but also for experienced traders who are testing new strategies or simply seeing the execution and advanced features the trading app offers.
Set Up Your Trading Space: Customize the platform according to your preferences. This includes selecting the financial instruments you plan to trade, setting up charts, and implementing any technical indicators you regularly use.
Trading Strategy: If you haven't already, define your trading strategy, including risk management. Setting loss limits and profit targets can help you keep your trading disciplined and focused on your long-term goals.
First Trades: With everything in place, you can start trading.
BlackBull Markets, founded in 2014 by Michael Walker and Selwyn Loekman in Auckland, New Zealand, has emerged as a trusted and regulated ECN broker offering access to diverse tradable instruments. BlackBull Markets stands out with its three distinct types of ECN accounts, catering to traders' varying needs and preferences: Standard Account, Prime Account, and Institutional Account.
The Standard Account is an excellent choice for traders seeking a cost-effective forex experience. It offers a convenient entry point without minimum deposit requirements and commission-free trading. Traders can access all tradeable instruments and utilize user-friendly trading platforms, including PC, Mac, mobile, and Webtrader.
The Prime Account provides a competitive edge for those looking to maximize their trading potential. With spreads as low as 0.1 pips and a commission of $6 per lot for most currency pairs, traders can benefit from tighter spreads and lower costs. The Prime Account requires a minimum initial deposit of 2000 USD and offers leverage of up to 1:500, along with micro lots for precise position sizing.
BlackBull Markets also caters to larger traders with its Institutional Account, providing a truly institutional trading experience. With a minimum initial deposit of 20,000 USD, traders can access customisable commission structures, 24/7 dedicated technical support, and a customised MAM/PAMM platform. Qualifying traders can benefit from free VPS access based on trading volume.
Regulation is key to BlackBull Markets' offering, ensuring a secure and transparent trading environment. Prominent authorities regulate the broker, including the Financial Services Commission of New Zealand (FSPR).
With a commitment to exceptional financial services and a focus on client satisfaction, BlackBull Markets has garnered a strong reputation within the industry. Their comprehensive range of over 26,000 tradable instruments, competitive trading conditions, and reliable customer support positions them as a top choice for traders seeking a trusted ECN broker.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.
