EUR/JPY – cross-rate currency pair Forex, consisting of euro and the national currency of Japan – yen.
Designation
The euro is denoted by the symbol €, the yen has the symbol¥, the letter designation in the Forex market: EUR and JPY.
Features of the currency pair
EUR/JPY consists of the most popular currencies on the Forex market. By value spread of this the currency pair is relatively high and is 3-5 items. For the most part, this is due to the method of calculating the currency pair - not directly, but through the US dollar (US Dollar).
Currency pairs that do not contain the US dollar in their composition are called cross-exchange pairs. All currency pairs contain the base currency in the numerator and the quoted currency in the denominator. In this case, the currency ratio indicates how many units of the yen are contained in one euro.
A feature of any Forex pair that has the yen in its composition is an increased volatility (oscillation amplitude) quotes. EUR/JPY is no exception to this.
The second feature of the pair is its dimension, instead of the usual decimal values, we are dealing with three digits before the decimal point and with an accuracy of two or three digits (depending on the Broker) after.
The third feature is the possibility of "night" trading, from the point of view of European traders. The exchanges of the Asia-Pacific region affect the activity in the national currencies of countries with geographical affiliation to this region. The Japanese stock exchange starts its work at 3-00 Moscow time. During the trading session, economic news is released, macroeconomic indicators of the national economy are published. This set of events occurring during the exchange session directly affects the EUR/JPY pair.
Features of the European economy and currency
When trading the EUR/JPY currency pair, you inevitably encounter an analysis of the states of the two economies of these developed countries. The euro "represents" the Union of 27 economies of countries and the Central Bank with headquarters in Germany. The European Banking Union (ESCB) is a network consisting of national banks from the countries of the Union.
The size of the euro's cash currency is the highest in the world (higher than the size of US dollars in cash), but the currency is issued not by the European Central Bank (ECB), but by the ESCB. The role of the Central Bank is supervisory and steering. It develops a common vector of issue, monetary, debt and financial policy, then actions are carried out on the exchange and Forex markets by the national banks of the ECB according to the plans and under the supervision of the ECB.
Features of the Japanese economy and currency
Technologically advanced Japan ranks second in the world in terms of economic development and third in terms of purchasing power parity.
The Bank of Japan's policy of stimulating the national economy has led to a reduction in interest rates to zero and negative values. Judging by the recovery of the exchange rate in favor of the European Union, after the fall of 2008, investors and speculators appreciate the efforts of the ECB in the economy more than the Japanese government.
If we look away from the monetary policy of the Japanese Central Bank, switching our view to the economy, it is worth noting the fact of low taxation of national corporations. Among developed countries, the total tax rate in Japan is 26.4% of GDP.
Additional information
The geopolitical situation of the two economies has an impact on the state of the economy and the exchange rates of national currencies. Japan is strongly influenced by the development of the PRC and disputes over island territories, while European countries are suffering from the influx of refugees from the Middle East and the marked trends of threats to the integrity of the European Union from the participating countries.