The USD/JPY is one of the most popular currency pairs in the forex market. Traders and investors alike pay close attention to its movements as it reflects the strength of the US dollar against the Japanese yen. As with any forex pair, the USD/JPY is subject to trading hours and market closures. In this article, we will explore when the USD/JPY closes on Forex Friday.
Forex Market Hours
The forex market operates 24 hours a day, five days a week. This means that currency pairs, including the USD/JPY, can be traded at any time during the week. However, this does not mean that every forex market participant is active at all times. There are specific trading hours when the market is most active and liquid, providing traders with more opportunities to buy and sell currency pairs.
The forex market is divided into four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. These sessions overlap, allowing for continuous trading throughout the day. The Tokyo session is particularly relevant for the USD/JPY pair as it represents the Japanese market’s opening hours.
When Does USD/JPY Close on Forex Friday?
The forex market closes on Friday at 4 pm EST (9 pm GMT) and reopens on Sunday at 5 pm EST (10 pm GMT). This means that the USD/JPY pair is not traded during the weekend. However, it is important to note that the forex market operates differently depending on the time zone. For example, the Friday close time in New York is different from the Friday close time in Tokyo.
In Japan, the forex market closes on Friday at 3 pm JST (6 am GMT). This means that the USD/JPY pair is not traded during the weekend in Japan. However, the New York forex market remains open for an additional hour after the Tokyo market closes. This means that traders in New York can continue to trade the USD/JPY pair for an hour after the Tokyo market closes.
It is worth noting that the forex market’s closure on the weekend does not mean that the market is completely inactive. Over-the-counter (OTC) markets, which operate outside of traditional exchanges, remain open during the weekend. This means that traders can still access the forex market through OTC trading platforms.
Why Does the USD/JPY Close on Forex Friday?
The forex market closes on Friday to allow market participants to take a break over the weekend. The closure also allows market makers and liquidity providers to reconcile their books and prepare for the next trading week. Additionally, the forex market’s closure on the weekend reduces the risk of unexpected events occurring and causing significant price movements.
The USD/JPY pair is particularly sensitive to unexpected events as it is affected by both the US and Japanese economies. For example, a sudden change in US economic policy could cause significant movements in the USD/JPY pair. By closing the market on the weekend, traders and investors are given time to react to any news or events that may have occurred over the weekend.
Conclusion
The USD/JPY pair is an important currency pair in the forex market. It is subject to trading hours and market closures, including the forex market’s closure on Friday. The forex market closes on Friday at 4 pm EST (9 pm GMT) and reopens on Sunday at 5 pm EST (10 pm GMT). However, it is important to note that the closure time varies depending on the time zone. The USD/JPY pair is particularly sensitive to unexpected events, and the forex market’s closure on the weekend reduces the risk of significant price movements.
