Japanese Yen's Historical Story In The Forex Industry
by: Devon Reyes on Mon, 13 Sep 2010 at: 1:45 PM Go to: Previous Article Next Article
The Japanese Yen has been through a lot of survival situations for centuries. That's why many people can't believe that the Japanese Yen was able to snatch the place in being one of the top 3 of the most traded currencies all over the world. Japan is undeniably one of the most infuential countries nowadays. But behind this success was a long trail of hardship. It all started in 1870 if the Japanese Yen was recognized as a currency.
After the World War II, it has almost lost all its value in the global market due to instability. This currency was able to recover if the Bretton Woods agreement was replace in the year 1971. The value of the Japanese yen at that period of time against the US dollars was at Y360 per US $1. From that moment on, Japan was able to recover their losses and stabilize their economy. Everybody is aware that the rate of all currencies mainly depends on their economic and political status. So one way of making your currency rate value much higher is to improve your economy and have a nice political feedback and management.
Though during that time it have assisted the Japanese yen's status to worth much more it is still undervalued. Due to this occurrence, Japan has worked really hard to improve the status of their economy and soon it was considered to be the one of the tight competitors of the US dollar. The Japanese yen started to depreciate in the year 1974 to 1976. The trials of this currency didn't stop there. Again it was tested in the late seventies and early eighties as the price of oil increased.
The Japanese Yen only began to increase its value if overseas establishments began to invest.
It has been the favorite pair of the US dollars and due to that it again increased its value. The pairings in the forex trading market somehow protrude the communication of the nations being paired. For it simply means that many individuals who are on the country requires this and that goes vise versa to the other countries. Another reason is, maybe it will be cheaper if they buy the product with this currency than the other. Getting paired to the most well-known currency only means one thing and that is the factors of being a potential major country is within that country.
Nowadays, the yen is very well know in the forex market. It has been consistently in demand. Its condition now it is more comparable to the US dollar. The forex world has a very high liquidity rate and becoming one of the usual traded currencies simply shows that Japan has become strong and stable.
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