1.11 Tokyo Trading Session

Tokyo or Asian trading session
 
The Tokyo session really starts off the FX trading day for the world. Being a major financial center of the Asia Pacific, the trading at this session sets the tone for the rest of the world – as they say, ‘morning shows the day!’ This session is also a call to action-stations for traders in other financially important centers like Sydney, Hong Kong and Singapore. 
 

Quick facts – Tokyo

 
  • Locally significant pairs such as AUD/USD, USD/JPY, and NZD/USD may be trading with higher volumes compared to pairs such as GBP/USD.

 

  • There may be quiet times during this session when markets will essentially trade flat with traders not having much to do. But these calm times may lay the base for a breakout later, so watch out!

 

  • Tokyo often corrects New York’s overbuying and selling. If US trading sessions create big moves in a particular pair, you could see a corrective move in the following Tokyo session.

 

  • Transactions on the Tokyo session reflect the trading and exporting activity of major exporting countries such as Japan and China. Many corporations and banks are active during this session arranging currency demand for imports and exports.

 

  • The Bank of Japan is an active FX player, as it frequently intervenes to curb appreciation in the yen. Moves by the BOJ can cause great volatility in the Tokyo session and later in the day, in the other sessions.
 

Japanese yen during Tokyo sessionWhich Currency Pairs to be Traded

 
There are no hard and fast rules because the market situations and conditions keep on changing, but if we consider an average day, we need to keep the eyes open for the news from Australia, New Zealand, China and Japan. The news from these countries come out during Tokyo session or slightly before it. Considering this, the Australian dollar, New Zealand dollar and Japanese yen can be in focus as any important news or economic releases can bring some strong price movements.
 
Please also note that and unexpected economic data or news from China affects the Australian dollar heavily because of heavy trade dependency and because AUD is a commodity currency. Towards the end of Tokyo session the London or European sessions start and there is an overlapping of these two sessions. That time is good to focus on GBP, EUR and CHF pairs with JPY and AUD and NZD. Please note that USD pairs with these currencies will always be in focus at all such times. 
 
 
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