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Talking about the Asian session which means Tokyo session at Forex, it is essential
to know that Japanese yen is third most traded currency on the platform and same
goes with Japan as it holds the third most traded session of Forex. Tokyo session
starts at 12:00 GMT, and during its entire working hours, it gets overlapped by two
other sessions, Sydney and New York. This session witness around 21% of the FX
transaction per day. Private companies and Central Banks are the leading traders
who remain highly active during the Tokyo session, Japan’s economy is mainly
dependent on exports and from the last few year’s China has also emerged as a
significant trade player.
The most suitable and trade worthy time is the early hours when economic and
finance related updates get updated, and FX market rates start rolling. Tokyo
session also acts as the leader of other sessions because the moves which get set
at this session gets followed or at least studied by the later coming sessions.
Thinning of liquidity is a common scenario in the Tokyo session, and traders often
wait for long hours to set a good trade. While liquidity gets the stick, currency
pairs became immobilized and get glued within a range. It provides a chance to
short day traders or potential breakout traders in the last hours of the day.
Majority of the traders likes to trade in currency pairs like AUD/JPY followed by
USD/JPN. Japanese yen holds a great place in FX market place as around 16-17%
transactions get done through this JPY.