Tokyo Session

Tokyo Session

Tokyo Session

When does the Tokyo session start?

Asian session starts when the Tokyo session opens at 12:00 AM GMT. Considered to be the financial capital of Asia, Tokyo session is sometimes interchangeable to Asian session. Don’t get confused once you stumble upon these terms.

London and New York are among the largest forex trading centers in the world, but you need to take note that there’s Japan as well. It is considered to be the third largest forex trading center in the world.

It’s actually not surprising at all since Japan’s Yen is the third most traded currency, sharing 16.50% of all forex transactions. Overall, about 21% of all foreign exchange transactions take place during this trading session.

The table below represents the Tokyo session ranges of the major currency pairs.

Using averages of past data from the month of May 2012., those data were calculated. Again, the values stated above are not absolute values. They can vary depending on liquidity and other factors like market conditions. If you are going back to the table, you will notice that the session range for EUR/CHF has not been included since the Swiss currency Franc has been nailed to the Euro at 1.2000 during that time.

So what are the characteristics that you need to know about Tokyo session?

1. It’s not all about Japanese territories and shores. Lots of foreign exchange transactions are created in other financial hotspots like Singapore, Sydney, and Hong Kong.

2. Commercial companies and central banks are the main market players during the Tokyo session. Always remember that Japan’s economy depends on export heavily. This makes a lot of daily transactions taking place along with China, which is also considered to be as one of the major trade players in Tokyo session.

3. Liquidity can sometimes be very thin or diluted. Another thing, patience is a virtue. There are times when trading during this period will be like watching a blockbuster movie – you need to fall in line and wait for your turn before you can buy and get a ticket.

4. Asian Pacific currency like AUD/USD and NZD/USD are more likely to be stronger compared to non-Asia Pacific pairs like GBP/USD.

5. During those times of thin liquidity,pairs stated above may stick within a range. This gives chances for short day trades or potential breakout trades later in the day.

6. When more economic data is released, expect more actions to take place early in the Tokyo session.

7. For the rest of the day, moves in the Tokyo sessions could set the tone. To help organize and evaluate what strategies to take in other session, traders in latter sessions will look at what happened during the Tokyo session.

8. It is not uncommon to see consolidation during the Tokyo session most especially after big actions in the preceding New York Session.

Which Pair Should You Trade during a Tokyo Session?

When news from Australia, New Zealand, and Japan comes out, then it is a good idea to participate in the Tokyo session and a good chance to trade news events. There could be more movement in yen pairs as well. This is because a lot of yen is varying hands as Japanese companies are conducting businesses.

It is also important to take into consideration that China has a powerful economy. Therefore, whenever news comes out from China, expect a stronger and volatile moves.

Japan and Australia rely much on Chinese demand, thus we could see greater actions and movements in JPY and AUD pairs when data from the China comes in.

That’s all about Tokyo Session.

Now, it’s time to check out how can you trade the London session.

Proceed to the next Lesson: London Session

Back to Previous Session: Trading Sessions



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