The two economies (Japan and New Zealand) are interconnected. The NZDJPY index shows the relative strength of the New Zealand Dollar compared to the Japanese Yen. Both countries have common interests in trading, and their Central Banks follow similar practices.

What is NZDJPY?

The NZDJPY is as old as their stock markets. Both economies are not liable in any economic alliance, and they can have their currencies free float against any other in the market. The currency pair shows the need for Japanese goods and services imported into New Zealand and vice versa. It concerns the overnight interest rates of both central banks that could either support or make the forex index plummet. However, the index has inputs from both the stock markets and could easily be approached by investors worldwide. It renews every 15 seconds, so traders willing to know how to invest in NZDJPY must keep tabs on potential price fluctuations.

How does the NZDJPY market work?

The NZDJPY works as every other forex index, and the daily demand for Japanese Yen or NZ dollars gives the tempo to the investors. A slight increase in the supply of Japanese Yen could easily make the index plummet. However, the index favored the Japanese Yen in most of the historical times. That shows the significant dependence of New Zealand on Japanese industrial production. Yet, investors willing to understand how to trade NZDJPY must stay alert and conduct their methods to plan their investments. The most popular strategies are carry and news trading, scalping, and conducting fundamental and technical analysis.

NZDJPY price history

Here is the history of the NZDJPY index:

2018

Throughout 2018, the index was close to 78.95 Japanese Yen to 1 NZ Dollar. The relevant strength of the two economies was undisputed, and the lack of discrepancies for the forex index gave fewer chances for short-selling profits. However, whoever decided to invest in the index in 2018 could have some profits a few years later, as we will see in the following bullets.

2019

During 2019, the index had a deep dive to 66.5 JPY for 1 NZD, but this did not last long. The end of the year showed some stabilizing trends, which meant that the index returned close to the area of 75.5 JPY for 1 NZ Dollar. That is something that held both economies tied to each other and with the need to follow the same fiscal policies.

2020

Nothing compares to 2020 in terms of financial turmoil. The index went down to 55 JPY for 1 NZ Dollar before returning to the average area of 78 JPY for 1 NZ Dollar. That had to do with fears about the cease of Japanese industrial production that could affect the Japanese economy and all the others in the Western world.

2021

As one of the first growth years after the pandemic, 2021 was a roaring year for the Japanese economy. The NZDJPY index was close to 82 JPY for 1 NZD, showing the decisiveness of the Japanese government to ease inflation and boost economic activity. As a result, people who managed to close an open position in the index during the year could have gained a severe profit on their investment.

2022

During 2022, the index had a lot of ups and downs. However, by the end of the year, it was close to 88 JPY for 1 NZD, showing the significant inflation that has struck the New Zealand economy. The support for the Yen from the Japanese Central Bank and the increase in the overnight interest rates supported the index in favor of the Japanese currency.

Current NZDJPY price

The current NZDJPY price is subject to fluctuation due to the volatility of the forex market. Investors can check it on the chart or the SimpleFX Webtrader platform.

Is NZDJPY a good investment?

Whether NZDJPY is a good investment depends on factors such as interest rates, monetary policies, geopolitical events, etc. The answer depends on analyzing these factors and the potential returns on investment. If the factors are also stable and there are more chances of return, this currency pair brings more interest from investors worldwide.

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