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EUR/JPY is known in financial markets as a currency pair. This particular pair is representative of the comparison of values between the Euro and the Japanese Yen. Currency pairs are easy enough to understand as they are designed to ask a simple question. That question is…
How many units of the second currency can be purchased using only one unit of the first currency?
So, in this particular case, the question would be…
How many Japanese Yen can be purchased using a single Euro?
Trading EUR/JPY Binary Options
When trading binary options based on the EUR/JPY currency pair, binary options traders must predict whether or not the Euro will grow or fall in value when compared to the Japanese Yen. If the trader believes that he or she will be able to purchase more Yen with a single Euro by the expiry time, he or she would purchase a call option. On the other hand, if the trader believes that the Euro will fetch less Yen by the time the option expires, he or she would purchase a put option. If these predictions are correct, the trader stands to earn up to 80% returns.
What Makes The Currency Pair Move?
As mentioned in our Currencies & Forex page, currencies react heavily to the economic conditions in the regions they represent. In this particular case, the value of this currency pair will trend up when the European economy grows at a faster rate than the Japanese economy and will trend down when conditions in Japan grow faster than economic conditions in Europe.