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Currencies

CHFJPY


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Benefits & Risks Trading CHFJPY

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Benefits of trading CHFJPY
  • Both currencies are safe-haven assets
  • Can be prone to volatility representing opportunity for traders
  • Protection from volatility from the US dollar
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Risks of trading CHFJPY
  • As a minor pair there is less liquidity than some of the majors
  • Volatility can be more unpredictable
  • CHFJPY is sensitive to interest rates changes

About CHFJPY

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What is the CHFJPY and why trade it?
  • The CHFJPY rate is the Swiss franc/Japanese yen currency couple. The base currency – CHF.
  • Since experiencing a decline in 2008, the pair has consistently trended upward, largely influenced by Japan's implementation of aggressive monetary easing policies.
  • Because of their distinct financial characteristics and low interest rates, the CHF and JPY currencies are both considered safe haven currencies.
  • The status of the franc and the yen as 'majors' is attributed to their position as the third and sixth most-traded currencies, respectively.
  • The Swiss franc, derives its CHF code from Confoederatio Helvetica - the Latin for Swiss Confederation.
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What drives the CHFJPY?
  • Key economic metrics for Japan, Switzerland, and the Eurozone, such as inflation, GDP, unemployment levels, and discount rates.
  • Statements issued by the financial institutions of Switzerland and Japan, and currency interventions affecting the Swiss franc and Japanese yen.
  • The economy of Japan can be affected by the performance of Asian stock indices such as Nikkei 225, Hang Seng, SSE Composite, and the SET50, while the economy of Switzerland can be influenced by European stock market indices such as Swiss Market Index, FTSE 100, DAX, and the CAC 40.
  • The Swiss franc is susceptible to the movements of certain commodities such as gold, oil, agricultural products, and base metals.
  • The economic performance of Japan, as well as the cost of coal, oil, aluminium, and other base metals used in the car industry, are factors that impact the Japanese yen.
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When is the most active time to trade the CHFJPY?

The most active time to trade the CHFJPY is during the overlapping trading hours of the European and Asian sessions, which is typically between 08:00 and 11:00 UTC.

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What are the advantages of trading the CHFJPY?
  • Trading the CHFJPY directly provides a safeguard against certain fluctuations in the value of the US Dollar, as there is no need to convert to USD prior to trading.
  • The market data available and well-known correlations make it possible to predict the market trends to a greater extent.
  • While Japan's currency is generally more susceptible to volatility than Switzerland's, both are considered relatively stable "safe haven" currencies that investors tend to seek out during times of crisis.

FAQs

CHFJPY is available for trading 24/5, however the pair is generally at its busiest between 15:00 and 19:00 GMT+2 (Server Time) during the intersection between London and New York Markets trading hours.

When you are buying CHFJPY, you are of the opinion that the price of the CHF will strengthen against the JPY. The reverse is true for a sell trade.

You can start trading CHFJPY on MetaTrader 4 today!

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