What is a Forex Broker?

 

 

In order to start trading foreign currency, you first need to identify a robust forex broker. A complete definition states that a broker is a firm that enables a trader to access a trading platform in order to place buy and sell actions on various currencies. It is very important to keep in mind that research needs to be carried out first before signing up with a new broker. You need to make sure that they have a positive reputation.

1) The Variety of Trading Tools

It is highly important to invest with the right trading tools at the same time on different trading markets. A smart idea is to pick an FX broker which can provide a wide array of trading markets to access this can also include CFDs, indices, stocks, and cryptocurrencies.

2) Variations in Trading Accounts

A functional broker needs to provide plenty of account options as possible all of them with specific benefits for the user. It is very important to be highly adaptable to different trading styles such as high risk or safer tones.

3) Spreads

A broker with the lowest spreads can be very profitable, but you need to keep in mind that different marketing techniques can be employed and sometimes these schemes can be harmful if you don’t fully understand how they work. A low spread can be great but only the most competitive brokers can focus on granting such options.

4) Optional Leverage

Forex is a market that is often traded with leverage. To manage a trading position and account, being aware of your leverage allowance is very important.

 

USDJPY forecast - Impact of Abe's resignation on the Yen

 

 

 

The Japanese Yen (JPY) is one of the most traded Asian currencies in the financial markets. And its pair with the US Dollar – USDJPY, forms one of the four major currency pairs, which are some of the most traded currency pairs in Forex.

Since December 2016, the USDJPY has been on a bearish trend implying the Japanese Yen has been bullish. And that trend played well into the current economic crisis around the world due to the COVID-19 pandemic.

The US dollar has had the hardest blow following the effect of the pandemic in the US, which has greatly affected businesses there.

On August 27, 2020, U.S. Federal Reserve Chairman Jerome Powell, unveiled Fed’s tactic to the current inflation. However, the speech hinted that the current low rates will continue for a longer period. Following Powell’s speech, the USD index used to track US Dollar greenback against other currencies registered a drop of about 0.09%.

As the strength of the US Dollar continues to drop, the Japanese Yen, on the other hand, seems to be gaining ground.

Shinzo Abe’s Resignation

Following the announcement that the current Japanese Prime Minister, Shinzo Abe, will be stepping down, there was scepticism of how the Japanese Yen will behave in the market with some fearing that there could be a shift in policy in Japan.

However, since the ruling Liberal Democratic Party in Japan still holds power, experts do not see a significant shift in Policy. The party is to elect its leader on September 14, 2020.

The biggest threat to Japan’s policy continuity

Shigeru Ishiba, who is the former Japanese Defense minister is seen as the biggest threat to the Japanese policy community. If elected, there could be ramifying policy changes, which would affect the Japanese Yen standing in the international market.

Ishiba currently seems to command a huge following in the public opinion though he lacks the Liberal Democratic Party’s support.

Best bet according to analysts

Yoshihide Suga who was the chief cabinet secretary under Shinzo Abe announced that we will be running for the prime minister’s post two days after Abe’s announcement that he would be resigning.

Suga has good support of the Liberal Democratic Party and is expected to continue with Abe’s policies if elected to become the next prime minister.

One of the main things that analysts look forward to is the fiscal and monetary stimulus programs that were rolled out during Abe’s tenure. It would be advantageous to the Japanese Yen if the next prime minister expanded these stimulus programs.

USDJPY – what to expect towards and after the Japan PM elections

At the moment, the USDJPY is expected to continue with its bearish trend mainly due to the weakening of the US Dollar and the Fed’s accommodative shift in how he Central bank responds to the inflation that was outlined in their recent report made through Powell’s speech.

If Suga wins to become the next Japanese prime minister in September, we could see a more determined JPY; meaning a stronger bearish trend for the USDJPY.

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