The Tokyo session is one of the main forex trading sessions. It is also called the Asian session. This session starts when the Tokyo market opens and runs for several hours. Many traders like this session because of its steady price moves and low volatility. Some pairs work better during this session than others.
In this article, we will explore the best pairs to trade during the Tokyo session. We will also look at why this session is unique and how you can make the most of it.
What is the Tokyo Session?
The forex market runs 24 hours a day from Monday to Friday. It doesn’t have a single center. Instead, it moves across different cities worldwide. There are three main trading sessions:
- Tokyo Session (Asian session)
- London Session (European session)
- New York Session (American session)
The Tokyo session starts when banks and financial institutions in Japan open. It runs from 12:00 AM GMT to 9:00 AM GMT. During this time, traders from Japan, China, Australia, and other Asian countries are active. The session overlaps with the Sydney session at the beginning and the London session at the end. While the Tokyo session has less movement than the London or New York session, it still offers great trading opportunities. Many forex traders focus on specific currency pairs that move well in this session.
Why Trade in the Tokyo Session?
The Tokyo session has some advantages that make it unique. Here’s why traders like it:
1. Less Volatility
The forex market moves faster during the London and New York sessions. Prices go up and down quickly. This can be risky for new traders. The Tokyo session has less volatility, meaning price movements are smaller and easier to follow.
2. Good for Trend Trading
During the Tokyo session, price movements are smoother. Trends form slowly and steadily. This helps traders use trend-following strategies without being stopped out by sudden price swings.
3. Strong Influence from Asian News
The Tokyo session reacts to economic news from Japan, China, and Australia. If important economic reports are released, currency pairs linked to these countries can move a lot.
4. Low Trading Costs
Some currency pairs have lower spreads during the Tokyo session. Spreads are the difference between the buying and selling price of a currency pair. Lower spreads mean traders pay less in transaction costs. Because of these reasons, many traders focus on the best pairs to trade during the Tokyo session.
Best Currency Pairs to Trade During Tokyo Session
Not all forex pairs are active in this session. Some are better choices because they have more movement and lower spreads. Let’s look at the top pairs.
1. USD/JPY: The Most Traded Pair
This pair is the most popular during the Tokyo session. The U.S. dollar (USD) and Japanese yen (JPY) are both major currencies. The Bank of Japan (BOJ) often makes announcements that affect the yen. This makes USD/JPY one of the best pairs to trade during the Tokyo session.
- Liquidity: High liquidity means easy entry and exit.
- Trend Strength: The pair often forms steady trends.
- News Impact: Any news from Japan or the U.S. can cause movement.
2. EUR/JPY: A Good Choice for Trend Traders
The euro (EUR) and Japanese yen (JPY) form a good trading pair. The euro is influenced by European news, while the yen reacts to Japanese news. This mix creates interesting price moves.
- Why trade it? It moves more than other pairs during the Tokyo session.
- Volatility: Less volatile than USD/JPY but still active.
- Best strategy: Trend-following strategies work well.
3. AUD/JPY: The Australian Connection
The Australian dollar (AUD) and Japanese yen (JPY) are both important currencies in the Asian market. This pair sees a lot of movement during the Tokyo session.
- Why trade it? It reacts to economic reports from Australia and Japan.
- Liquidity: High during Tokyo session.
- Best strategy: Breakout strategies work well.
These three are the best pairs to trade during the Tokyo session. They provide good movement, low spreads, and predictable trends.
How to Trade During the Tokyo Session
Trading in the Tokyo session requires a good strategy. Here are some tips:
1. Watch for News Events
News from Japan, China, and Australia can move prices. Check the economic calendar for important events before trading.
2. Use Trend Trading Strategies
The Tokyo session moves slowly and smoothly. Traders should use trend-following indicators like:
- Moving Averages
- Bollinger Bands
- MACD
3. Be Aware of Overlapping Sessions
The Tokyo session overlaps with the Sydney session at the beginning and the London session at the end. This overlap can cause more volatility in the market.
Trade with Defcofx: A Broker You Can Trust
If you want to trade the best pairs during the Tokyo session, you need a reliable forex broker. Defcofx offers everything a trader needs for success.
Why Choose Defcofx?
- High leverage options: Get up to 1:2000 leverage to increase your trading power.
- 40% welcome bonus: Available for deposits over $1,000.
- No commissions or swap fees: Trade with low spreads starting at 0.3 pips.
- Global access: Trade from anywhere with multiple language support.
- Fast withdrawals: Get your funds in 4 business hours, even on weekends.
With Defcofx, you can trade confidently during the Tokyo session.
Conclusion
The Tokyo session is a great time to trade. It has low volatility, strong trends, and lower spreads. The best pairs to trade during the Tokyo session include:
- USD/JPY for liquidity and strong trends.
- EUR/JPY for steady price action.
- AUD/JPY for high movement during economic news.
If you want to trade these pairs, Defcofx is a great broker. They offer high leverage, low spreads, and fast withdrawals. Start trading today with Defcofx and make the most of the Tokyo session!
FAQ: Best Currency Pairs to Trade Tokyo Session
What time does the Tokyo session start and end?
The Tokyo session starts at 12:00 AM GMT and ends at 9:00 AM GMT. This is when financial markets in Japan, Australia, and other Asian countries are most active.
Which currency pairs are best for trading in the Tokyo session?
The best pairs to trade during the Tokyo session include USD/JPY, EUR/JPY, and AUD/JPY. These pairs have high liquidity and react to news from Japan and Australia.
Is the Tokyo session good for beginners?
Yes. The Tokyo session has lower volatility than the London and New York sessions. Price movements are more stable, making it a good time for beginners to practice trading.
Why do JPY pairs move the most during the Tokyo session?
JPY pairs move a lot because Japan’s banks and financial markets are open. Traders in Asia focus on the yen, causing more price action in USD/JPY, EUR/JPY, and AUD/JPY.
Can I trade during the Tokyo session with Defcofx?
Yes. Defcofx offers fast execution, low spreads, and high leverage for traders. You can trade the best pairs to trade during the Tokyo session with Defcofx and enjoy a secure trading environment.
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