{"id":834,"date":"2013-03-01T17:30:07","date_gmt":"2013-03-01T16:30:07","guid":{"rendered":"http:\/\/tradersnest.wpengine.com\/?p=834"},"modified":"2014-04-23T17:04:32","modified_gmt":"2014-04-23T16:04:32","slug":"profit-currency-war","status":"publish","type":"post","link":"https:\/\/www.tradersnest.com\/blog\/profit-currency-war\/","title":{"rendered":"How to profit from the currency war"},"content":{"rendered":"
Forex traders can be a perverse bunch \u2013 they can thrive on a news story, whether it\u2019s good news or bad news.<\/p>\n
And while they may curse central banks who jump in to manipulate prices, plenty of forex traders have done very well out of the currency wars going on in Asia.<\/p>\n
It\u2019s been a few months since Maven has taken a hard look at the yen \u2013 and a lot has happened in the meantime\u2026<\/p>\n
The Japanese Yen has been a big money-spinner for traders in recent years \u2013 and there\u2019s every reason to believe that it will continue to be so. As long as you\u2019re on the right side.<\/p>\n
Back when the financial crisis struck in 2007, investors began piling their money into safe havens, desperate to get away from the failing euro. And one of those safe havens was the Japanese Yen.<\/p>\n
This in-flux of money has driven up the value of the yen \u2013 and had a devastating effect on Japanese industry.<\/p>\n
Back in 2007, the Japanese could get around 120 yen to the dollar \u2013 a situation which put them at a huge advantage when exporting around the world. Japanese exports seemed cheap to the rest of the world.<\/p>\n
Scroll forward to the beginning of 2012, and you\u2019re getting around 75 yen to the dollar. Japanese exports had rapidly got very expensive.<\/p>\n
Of course, we can expect currencies to strengthen as economies grow, but the Japanese economy hasn\u2019t been growing. So the strength of the yen isn\u2019t being driven by anything positive going on in Japan \u2013 it\u2019s purely caused by the relative weakness of other currencies.<\/p>\n
And it\u2019s been causing the Bank of Japan serious problems.<\/p>\n
Here\u2019s a chart showing the USDJPY from 2007.<\/p>\n