The economy of Japan has some specific attributes that are noteworthy, especially when you are trading with the Yen. Traders must understand these traits to make smart investing choices. The first point to note is despite Japan’s size, it has unfortunately not been witnessing the expected growth it deserves primarily because of the collapse of the real estate and the equity bubbles that took place in 1990. You will find writers in the financial market often refer to this period in Japan as the lost decade. Since then, the nation’s growth has hardly been more than 2% especially between 2001 to 2011. It dipped to 29% from 2012 to 2015. The country is also well known for deflation, and it has been a part of the nation’s economy for the past 20 years.
Kavan Choksi Japan– drivers of the Japanese Yen in the global economy
Kavan Choksi Japan is an esteemed business expert, investor, and wealth consultant known for his proven track record in helping businesses across the globe to make the most out of their investments. When it comes to trading in the forex markets, he says that one should be aware of the latest news and events across the globe. They have the ability to affect the financial markets in a positive or negative manner. For instance, the recent win of the right-winged coalition government in Italy will play a crucial role in the world when it comes to the stock market prices like other past global events. A savvy trader will always be aware of the economic data and the news to make smart, informed investments in the market.
Japan is an advanced global economy and is a leading exporter
He states Japan is one of the most advanced economies in the world, with a workforce that is well-educated. He adds though there are some industries like shipbuilding that have migrated to other nations like China and South Korea, Japan still remains a primary manufacturer of consumer electronics, technological components, and autos. This has left the country with significant exposure to the international economy at large.
Rates of foreign exchange
There are many theories that have tried to explain the rates of foreign exchange. Some of them are the parity of interest rates, the parity of purchasing power, the Fisher effect, and others that have provided explanations about the correct rates of interest. They are based on several factors like the price level, the relative rates of interest, and others.
Kavan Choksi Japan states that in the practical sense, the above models that have been listed above do not function well in the real-financial markets. Here, the laws of demand and supply that are dependent upon a number of factors that impact the market psychology determine the market rates of exchange.
The primary economic data contains retail sales, the issue of GDP, trade balances, inflations, and production in the industries of the nation. At the same time, traders in the market must also consider the employment levels and the rates of interest, with information about the scheduled meetings of the nation’s Central Bank and others.
