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Strong Yen Harms Japan's Economic Strength

Japan’s Strong Yen and Binary Options

Japan announced its largest trade deficit ever as the country struggles to recover from last year’s devastating earthquake and the country’s strong yen.  While it is very understandable how last March’s earthquake affected the country’s economy as Japan moved massive resources to help aid its citizens, but the strong Yen seems a bit odd.  After all, it was just this past summer investors raced to the safe haven of the Japanese Yen.  But a high yen means it costs more for Japanese manufacturers to produce goods and that cost is passed to consumers.  Analysts are expecting for the high trade deficit to last at least through the first half of this year. 

What does this mean for the binary options investor?  Traditionally countries do not like incurring large trade deficits and for a manufacturing heavy country like Japan, they will try to reduce it.  The most likely way that Japan will try to immediately alleviate their debt crisis by weakening the yen, allowing for the manufacturing costs to fall so that consumers will purchase Japanese goods.

For a binary options trader, knowing what to look for in the market can greatly increase chances of successful trading.  Understanding that Japan will be looking for a weaker yen means that news about interest rates and other economic indicators can signal the start of the depreciation.  While other investors may take individual market news in unique events, understanding the patterns and significance of the data, you can improve your market understanding and increase your successful trade percentage.

While Japan will look to recover from its large trade deficit, astute binary options traders can seize the moment in the next few weeks as Japan works to recover from this deficit and the Yen begins to fluctuate. 

Tuesday, 21 Feb, 2012 / 8:40

Source : http://www.24option.com

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