Can the Dollar Keep up Its Performance against the Yen in 2017?

Although the forex market is always more volatile than most due to the continual fluctuation in currencies, this year has seen a significant number of geopolitical events that have made it even more so. With Brexit in the UK, the impeachment of the Brazilian president, a stunning victory by Donald Trump in the United States and Italy’s political tension with a voted down referendum, there is so much going on that currencies are more volatile than ever. One of the major pairs that had a bit of a surprise turnaround was the United States dollar and the Japanese yen. Can the dollar keep up its performance against the yen in 2017? Here is some of what market analysts are saying.

Market Activity in Late November

In late November, just as the nation was getting used to the idea that Donald Trump won the presidency, oil prices began to rise and there was hope on the market that inflation would result, meaning that the dollar would gain in value. Analysts feel that it was the ‘shock’ of this victory that held the promise of greater fiscal spending and a tightening of the budget that spurred activity that resulted in the dollar’s best performance against major currencies in a very long time, 14 years to be exact.

Dollar Rallies against the Yen

One of the things which forex traders using services as Hantec Markets are following is just how much the dollar rallied against the yen. The USD / JPY is one of the major pairs and since the yen had been seeing better movement than the dollar for literally years, the dollar’s gain of nearly 8 percent against the yen is what caught the immediate attention of forex traders. Now everyone is looking at exactly what happened, why it gained so much when the yen saw little movement and if that momentum can carry over into the coming year, 2017.

Who Holds the Trump Card?

By now that has become almost cliché, but when it comes to forex trading, it holds a special significance. With Donald Trump in the White House, it is likely that he will reign in on spending, automatically adding value to the dollar while incentivizing companies to bring their business back to the US or, in many cases such as that of Carrier, not to take their business abroad. In other words, whatever is good for the economy is good for the value of the dollar and that is what traders will be watching closely. Will Trump hold true to his campaign promises? If so, what kind of impact will that have on the economy that will filter its way down to the value of the dollar and the likelihood that the dollar will keep rising against the yen.

Unless you are a fortune teller, there is really no way to tell whether or not the dollar will keep up its performance against the yen, but at the current time it looks very probable that this just might be the case. Trump’s early performance, even before being sworn in, shows that he’s going to hold true to some of his promises to “Make America great again” and if he does, you can expect the dollar to grow and political issues in Japan to keep the yen on hold or devaluing to some extent. This year, it is likely that traders will be betting the dollar against the yen whereas last year it was the yen against the dollar. What do you think?