Trading the Yen Crosses.

The JPY is one of the more popular cross currencies and it is basically traded against all of the other major currencies.

EUR/JPY has the highest volume of the JPY crosses according to the latest Triennial Central Bank Survey from the Bank for International Settlements.

GBP/JPY, AUD/JPY, and NZD/JPY are attractive carry trade currencies because they offer the highest interest rate differentials against the JPY.

When trading JPY currency cross pairs, you should always keep an eye out for the USD/JPY.

When key levels are broken or resisted on this pair, it tends to spill over into the JPY cross pairs.

For example, if USD/JPY breaks out above a key resistance area, it means that traders are selling off their JPY.

This could prompt the selling of the JPY against other currencies.

Therefore you could expect to see EUR/JPY, GBP/JPY, and other JPY crosses rise as well.

The CAD/JPY

Over recent years, this currency cross has become very popular, becoming highly correlated with the price of oil.

Canada is the second-largest owner of oil reserves and has benefited from the rise of oil prices.

On the other hand, Japan is heavily reliant on the importing of oil.

Over 99% of Japan’s crude oil is imported as it has almost no native oil reserves.

These two factors have caused an 87% positive correlation between the price of oil and CAD/JPY.

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