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Forex News

Japan’s Golden Week Set to Move JPY

April 17, 2019
BY Emma Richards

Yen traders may well be preparing to close their active JPY orders as Japan’s coming market shutdown stirs analytic speculation. This year, Japan’s Golden Week will last 10 days, starting on April 27 and ending May 6—the longest break in Japan’s history. The worry is that this extended celebration will completely close the Japanese financial markets, leaving them wide open to manipulation.

Analysts are wildly debating what might happen to the price of JPY over the long break, and most of them are predicting doom and gloom. Whatever happens, forex traders already have an idea about how to make money from a forecasted fall. Get your trading account active and well-funded and take advantage of JPY’s biggest indicator of the year. Maybe you’ll have a good reason to celebrate too.

What to expect from Golden Week 2019

With Golden Week just around the corner, analysts have started expressing concern about JPY market manipulation.

With Golden Week just around the corner, analysts have started expressing concern about JPY market manipulation.Japan’s financial services are already urging yen traders to manage their open orders before Golden Week starts. Any orders still open after the Japanese shutdown will remain locked in position for 10 days and at the mercy of the global markets. The likely assumption is that traders will close their orders before the Japanese celebrations begin. This can lead to the risk of low liquidity, which opens the door to pump and dump manipulations and rapid price swings.

Whenever Japan’s market goes offline, traders are quick to take advantage—the 2019 New Year ‘flash crash’ being a good example. Within minutes of the first dump, traders everywhere unloaded mass volumes of Aussie dollars and Turkish lira, which provoked trading bots everywhere to follow the shift. Traders not using a mobile trading app came home to find JPY in pieces.

Impact on the Japanese economy

The city of Tokyo is already preparing for the Japanese national holiday, and so are traders everywhere.

TJP Morgan’s recent forecasts suggest that Japanese consumer durables and retail food sales may well take a sizable hit in the first few days, along with other industries such as automotive and technology. Japan has also warned its citizens to withdraw cash from banks before the long break, as ATMs might run dry. Westerners are only now realizing the importance of Golden Week and the trading opportunities it can create. If you’ve never traded JPY during Japan’s Golden Week, then you’re in for a wild ride that’s full of surprises.

What you can do as a forex trader

A forex trader has the option to ‘Buy’ JPY when the market seems favorable, and ‘Sell’ when an event pushes prices down. The holiday break will almost certainly cause extreme volatility during the 10 days of Golden Week. Experienced day traders will be hoping to make the most of the massive moves. Expect low JPY prices by the end of the holiday period that will make ‘Buy’ orders the obvious choice for traders forecasting a yen rebound once the market reopens.

Traders wishing to open orders before the JPY recovery kicks in will need to act fast. The reopening of trading channels after such a long break will likely cause a very stormy first day back. FX News recommends that you carefully consider your ‘Stop Loss’ and ‘Take Profit’ levels. We also remind all Exness traders to consider a more cautious leverage setting when trading highly volatile currency pairs. Orders with high leverage and low funding could quickly face stop out actions before more favorable trading conditions can start producing results.

If you’re new to trading, then brace yourself for what could be one of the biggest forex market shifts of the year.

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