As two of the world’s most stable currencies, the JPY/NOK exchange rate provides a safe haven for traders during times of market turbulence. Volatility in the pair also leaves room to make a steady profit when converting JPY to NOK. This page will break down reasons to trade the pair, influences on price movement, using a JPY vs NOK chart, and popular forex principles to follow when investing.
Breaking Down JPY/NOK
Firstly, what does the JPY/NOK mean? It is simply the forex quote for the Japanese yen vs Norwegian krone exchange rate. The yen is the base currency, whilst the krone is the counter currency.
Pros Of Trading JPY/NOK
- Safe haven – The JPY is a safe haven currency. This means it is expected to retain or increase in value during times of market volatility. Investing in safe havens can limit your exposure to losses in the event of market downturns.
- Volatility – The JPY can experience volatility when trading to NOK, especially during risk-on / risk-off environments. This, coupled with the safety seen in the JPY, can make investing in the pair an attractive choice for traders looking to make a stable profit.
- Oil prices – Changes in global oil prices can affect the JPY/NOK rate as Japan imports 99% of its oil. Tracking oil prices, therefore, can make the currency pair relatively straightforward to follow.
- Availability of resources – There is an abundance of publicly available economic and government data for both the JPY and NOK. Technical analysis today is also easier than ever before. This is because you can analyse graphs and candlestick charts with customised indicators and sophisticated investing tools.
Influences On Movement
Several factors can influence the JPY to NOK exchange rate. Being aware of these can help you to make accurate forecasts as to which direction the pair is likely to move and by how many pips. This will help you maximise the value of trades.
As with all currencies, economic triggers can cause fluctuations in the value of the JPY/NOK pair.
Norway is one of Europe’s most stable economies. Its economy is well-developed and has shown vigorous growth since the beginning of the industrial period. Japan has a strong industrial base and is home to some of the largest and most technologically advanced producers of motor vehicles, electronics, machinery, steel and nonferrous metals, ships, chemicals, textiles, and processed foods. Both economies are relatively strong, but any instability in either country will affect the value of 1 JPY into NOK.
Currency investors may seek out the NOK when the Euro’s (EUR) value is in doubt. As a result, following appetite in the Euro can prove a useful way to get the inside track on which direction the JPY/NOK will move. Most top forex brokers offer a wealth of data on the Euro and leading currencies.
Norway is Western Europe’s leading oil exporter. Japan is also the fourth largest importer of crude oil and the second biggest importer of natural gas. The country relies on these importations to satisfy domestic energy requirements. This means changes in the global price of crude oil will affect NOK to JPY forecasts.
The Japanese government is implementing a range of economic initiatives to strengthen the economy.
The Bank of Japan’s huge easing program has driven significant weakness in the Japanese yen recently, but any sudden global headwinds, along with further instability in the Eurozone, could see traders moving to safe haven currencies. This will drive the JPY/NOK rate lower.
As a result, day traders need to keep an eye on Bank of Japan (BoJ) interest rates and government announcements, as these will influence the value of the FX pair.
JPY/NOK Technical Analysis
Day traders looking to make a profit from the NOK to JPY rate may need to use a range of charts and converters to make an accurate forecast. You can also use them to measure the pip value for the pair.
A JPY into NOK chart will allow you to observe historical trends and other common exchange rate patterns. These can all help predict future exchange rate moves. MT4, for example, offers user-friendly graphs with a host of drawing tools and overlays.
Using a currency converter ahead of your trade will give you the live value of the JPY to NOK rate, so you can project the value of the trade. A top forex provider, such as TradingView, offers excellent tools such as live exchange rate charts, historical data and real-time quotes.
Principles Of Trading JPY/NOK
When trading JPY to NOK, you will need to develop a good strategy to build into your investing plan. This will significantly increase your chances of success when trading forex.
The popular principles below are common day trading tactics to help you become a successful forex trader.
- Keep up to date with JPY/NOK news – The value of the JPY/NOK rate will change depending on government announcements, decisions on monetary policy, oil prices and more. Keeping up to date with the latest news will enable you to make more accurate projections when trading the JPY/NOK.
- Set aside funds – Look at how much capital you’re willing to risk on each trade and set your pip value accordingly.
- Make time – Day trading takes time. You need time to track the global forex markets and spot opportunities to place your trades at the right moment.
- Start small – Start with small amounts to test out your strategy. This is especially true if you are trading a new currency pair for the first time. Starting small allows you to see what does, and doesn’t work, without risking too much on a first attempt.
- Use limit orders – Set stop losses to help manage your JPY/NOK trades. If the currency pair dips below a certain point, stop losses will automatically exit your trade, meaning you won’t lose too much.
- Stay calm – Forex markets can test your nerves. It’s important to not let emotions get in the way of your strategy. Decisions should be made using logic only.
- Stick to your trading strategy – Developing a strategy in advance is important to make forex trading successful. Having a strategy will help give you a plan and parameters that you can stick to.
Final Word On Trading JPY/NOK
The JPY/NOK forex pair offers a good option for traders looking to invest in a safe haven. While not traded in the significant volumes seen with major FX pairs, trading the NOK to JPY rate still leaves plenty of room to implement effective trading strategies. It’s important to stay on top of the JPY to NOK news, the latest government announcements, economic developments and global oil prices. When investing in JPY/NOK, use a top broker to assess historical trends and predict future price movements.
Why has JPY/NOK been so weak?
The low nominal value of the Japanese yen is a result of World War II. Wartime spending led to massive inflation. At the end of the war, the Japanese yen was valued at 360 yen to 1 US dollar (USD). The strength of a currency is measured not by its change over time but by its nominal value.
Why is the JPY a safe haven?
There are multiple arguments as to why the JPY is a safe haven. Most notably, Japan has a positive net foreign asset position. The Japanese yen also has zero to negative interest rates, making it common for borrowing. When there’s a crisis, people sell their assets and borrow less.
Is JPY/NOK a top currency pair to trade?
Both the JPY and NOK are among leading currencies to buy and sell. The United States Dollar (USD), European Euro (EUR), Swiss Franc (CHF) and Swedish Krona (SEK) are also forecast as popular currencies for online trading.
What time does the forex market move the most?
The most favourable time to trade forex is 08:00 to 12:00. This is when the New York and London forex markets overlap. These two trading centres account for more than 50% of all forex trades.
What are the world’s most stable currencies in 2021?
The Swiss Franc (CHF), Japanese Yen (JPY) and Norwegian Krone (NOK) are the top three most stable currencies in 2021. They provide relatively safe global currencies for generating stable profits.