More Comments on the Japanese Yen

Earlier we had this from the Ministry of Finance:

Japan’s Finance Minister Suzuki speaking on exchange rate excess volatility

Volatility

In trading terms, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a way of describing the fluctuation of an instrument. For example, a highly volatile stock equates to high price swings, while a low volatility stock equates to low price swings. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be an important determinant in the development of trading systems, protocols or regulations. In retail, traders can be successful in both low and high volatility environments, but the strategies employed are often different depending on the volatility. Is volatility good or bad? In the forex space, lower levels of volatility on currency pairs offer fewer surprises, moves and are suitable for certain types of individuals such as position traders. By extension, highly volatile pairs are attractive to many day traders. This is due to fast and strong moves, which collectively offer higher profit potential. However, the risks associated with these volatile pairs are manifold. It should be noted that the volatility of instruments or indices can and does change over time. There can be periods when even very volatile instruments show signs of stagnation, with the price not really moving in either direction. For example, certain months in the summer are associated with low trading volatility. Too little volatility is just as problematic for markets as too much. Too much volatility can cause panic and create its own problems, such as liquidity constraints.

In trading terms, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a way of describing the fluctuation of an instrument. For example, a highly volatile stock equates to high price swings, while a low volatility stock equates to low price swings. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be an important determinant in the development of trading systems, protocols or regulations. In retail, traders can be successful in both low and high volatility environments, but the strategies employed are often different depending on the volatility. Is volatility good or bad? In the forex space, lower levels of volatility on currency pairs offer fewer surprises, moves and are suitable for certain types of individuals such as position traders. By extension, highly volatile pairs are attractive to many day traders. This is due to fast and strong moves, which collectively offer higher profit potential. However, the risks associated with these volatile pairs are manifold. It should be noted that the volatility of instruments or indices can and does change over time. There can be periods when even very volatile instruments show signs of stagnation, with the price not really moving in either direction. For example, certain months in the summer are associated with low trading volatility. Too little volatility is just as problematic for markets as too much. Too much volatility can cause panic and create its own problems, such as liquidity constraints.
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