Inside the Currency Market: Mechanics, Valuation, and Strategies

Seasonality and U.S. Dollar/Japanese Yen

Traditionally, the U.S. dollar/Japanese yen peaks during the year around April or May along with LIBOR. The answer is believed to be due to Japanese governments who pass and vote budgets during this time. The Ministry of Finance in Japan writes initial budgets in December, adjusts the budget in February due to supplementary requests by Japanese Ministries, and a vote is held around the April/May period in the Japanese Diet (Ministry of Finance2010). Japanese companies pass budgets in line with government budgets for purposes of business planning and taxes. If U.S. dollar/Japanese yen peaks, Japanese yen/U.S. dollar bottoms and allows Japanese yen to be borrowed to fund the new year.