The document discusses Japan's weak economy over the past two decades, which has led to an overly strong yen. However, Japan's new prime minister Shinzo Abe has implemented a three-pronged policy to stimulate growth, including doubling the money supply to reduce the yen's value. This has caused the yen to fall by 20% in the past year. The document provides tips on how traders can profit from Japan's falling yen through fundamental and technical analysis of currency pairs, and by following announcements from government officials and central banks. Success will depend on trading the yen's continued decline until policies change or political shifts in Japan cause the yen to rise again.

1. Trading a Falling Yen
By
www.TheForexNittyGritty.com

2. The Japanese economy has been
asleep for two decades after a real
estate and stock market bubble
and subsequent crash. The
combination cause and effect has
been an overly strong Yen.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

3. In regards to currency trading,
why is the Yen considered a
safe haven currency? The Yen
has been strong, overly strong, as
a result of the deflation at home
as well as the monetary policy
pursued by Japan.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

4. However, this policy has made
Japanese products overly
expensive and hurt the export
driven economy.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

5. Today things are changing in
Japan as Japanese Prime Minister,
Shinzo Abe is following a three
pronged policy to get the Japanese
economy moving again.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

6. Part of this policy is to double the
money supply by next year. The
Yen has fallen twenty percent
since the first of the year. Trading
a falling Yen is new territory for
the majority of Forex traders.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

7. Trading a falling Yen can be
profitable, or not, depending on
how well one carries out
fundamental analysis of Forex
pairs as regards the Yen and
other currencies.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

8. And, success in trading a falling
Yen will depend on technical
analysis of major Forex
currencies as other nations
adjust their monetary policies in
order to protect their respective
balances of payment.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

9. Japanese Fiscal and Monetary
Policy
www.theforexnittygritty.com/forex/trading-
a-falling-yen

10. For years after the Second World
War Japan encouraged savings by
its people. This resulted in large
bank accounts and lots of money
to lend in Japan.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

11. It was, to a degree, the cause of
the excessive buying of property
and stocks that lead to the crash
twenty years ago. Since that time
Japan has been trapped in
deflation in which the Yen has
been overly strong.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

12. This has hurt exports, production,
and employment. The policy by
the new government is meant to
correct labor laws as well as
import rules to make the
economy more efficient and
competitive.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

13. In addition, increasing the
monetary supply is meant to
reduce the value of the
Yen, which it has, and increase
exports which have gone up.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

14. The previously moribund
Japanese economy rose at an
annualized rate of three and a half
percent in the first quarter of the
year.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

15. The third leg of the stool is greatly
increased government spending
meant to stimulate the economy,
add jobs, raise wages, and further
raise economic production. If the
entire package works, traders will
likely be trading a falling Yen for
another year or so.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

16. Profiting from Trading a
Falling Yen
www.theforexnittygritty.com/forex/trading-
a-falling-yen

17. Profitable tips for Forex day
trading include following the
pronouncements of government
officials and central banks.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

18. Although the fundamentals
eventually set Forex prices,
market sentiment is greatly
swayed by the Forex news and
predictions that drive prices.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

19. Traders will want to cash in on
the trend as the Yen continues to
fall and be alert for a turn around
when the policy runs its course or
when politics change in Japan and
drive the Yen back up.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

20. Trend trading, scalping, and
channel trading will apply in
trading a falling Yen.
www.theforexnittygritty.com/forex/trading-
a-falling-yen

21. As always do your own
fundamental analysis, keep
abreast of market sentiment, and
when you do not understand the
market sit on the sidelines and
watch instead of guessing and
losing your trading capital.
www.theforexnittygritty.com/forex/trading-
a-falling-yen