US Dollar (USD) and Japanese Yen (JPY)
During the global economic/financial crisis that started in late 2008, many investors liquidated their positions into cash holdings and purchased heavily into both the Japanese Yen as well as the US Dollar, leading to a higher exchange rate for these 2 currencies against the rest of the global currencies.
For example, 1 Australian Dollar was trading at 56.4 Japanese Yen in February 2009. The Australian dollar (as well as the rest of the global currencies) has recovered and is now trading at 1 Australian Dollar compared to 77.5 Japanese Yen.
Similarly, 1 Australian Dollar was trading at 0.63 US Dollar in February 2009. The Australian dollar has recovered and is now trading at 1 Australian Dollar compared to 0.82 US Dollar.
The US Dollar (USD) and the Japanese Yen (JPY) are among the most traded pair of currencies in the world. Amongst themselves however, the exchange rate fluctuations is not as pronounced, since they tend to move in tandem compared to the rest of the global currencies. The interest rates determined by the Federal Reserve (Fed) and the Bank of Japan (BoJ) continue to fundamentally impact the value of US Dollar compared to the Japanese Yen as well as their respective trading trend.
We are now starting to see a devaluation of both the US Dollar and the Japanese Yen with the optimism that the financial markets are starting to recover from the global financial crisis. This signals an increase appetite to move into stocks and shares (higher yielding assets). Currently, 1 USD is trading at 0.1058 Japanese Yen.
Some analyst forecast that there is still more downside for both the US Dollar and the Japanese Yen. The Dow Jones Index has just broken through the 9,000 points resistance and this trend may yet continue (investors moving from Japanese Yen and US Dollar into stocks). Focus on forex trading may also turn to Euro, Swiss Franc as well as Asian currencies like the Indonesian Rupiah, Thai Baht and the Singapore Dollar which took a beating during the global financial crisis.
