Tokyo Trading Session

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et’s start with the opening and closing times during the Tokyo session and what time it is in the rest of the world.

Most Asian Forex sessions start the trading week on Monday morning at 09:00 and close at 18:00 Japanese Standard Time (JST). 

In London, traders will have to work from 00:00 (GMT) in the early hours of the morning until 09:00(GMT) if they want to follow the Asian session in real-time. 

It is a bit more complicated about the New York traders who want to trade in the Asian session. When Tokyo starts on Monday morning at 9:00(JST), New York traders have to start trading at 19:00(EST) on the previous evening – Sunday evening. 

Keep in mind that the Forex market trades 24 hours a day, so the official starting hours are subjective. However, it is generally accepted that the Asian session begins when Tokyo banks come online due to the volume of transactions they facilitate. 

New Zealand and Sydney, Australia, are technically the first sensible financial centres to start the trading day.

You may notice that we refer to Tokyo session as the Asian session since Singapore and Hong Kong have an even bigger trading volume than Tokyo. 

The yen is the third most traded currency, partaking in 16.8% of all forex transactions.

The Asian session has around 20% of all forex trading volume, where Singapore and Hong Kong have 7.6% volume each, while Japan has only 4.5% of the volume. 

You can look at the table below. It shows the Asian session pip ranges of the major currency pairs.

These pip values were calculated using averages of past data. Note that these are NOT ABSOLUTE VALUES and can vary depending on liquidity and other market conditions.

Also, the session range for EUR/CHF has not been included since the Swiss franc has been pegged to the euro at 1.2000 during the period.

Tokyo session’s key characteristics:

  1. Higher volatility compared to the Pacific session. 
  2. Daily trends are usually formed during the Asian session as China being one of the major traders, responsible for a huge volume of export
  3. The most-traded instruments are EUR / JPY and USD / JPY. Japanese and Chinese stocks and indices are most actively traded.
  4. It is not only limited to Tokyo transactions, but many of the financial transaction during the Tokyo session also happen in Hong Kong, Singapore or Sydney, due to the fact there are only a few hours time difference 

Naturally, you will notice stronger moves in pairs like AUD/USD than in non-Asia Pacific ones, such as GBP/EUR.

During those times of thin liquidity, most pairs may stick within a range. This provides opportunities for short day trades or potential breakout trades later in the day.

Most of the action takes place early in the session when more economic data is released.

You might think that your trading system is inconvenient – based on your time zone and when different trading sessions open, you are sometimes forced to wake up at the early hours of the night to trade. 

The unfortunate part is that the market does not give a heck when you wake up trade. And sometimes it doesn’t even reward you for waking up early.

The good news is that even if you don’t wake up for the opening of the Tokyo session, it’s useful to look at what happened during the session, so you organise and evaluate your strategies to take in other sessions. 

Because moves in the Tokyo session set the tone for the rest of the day.

Which Pairs Should I Trade?

We shouldn’t forget that anything that happens to one’s country’s economy or political situation will influence the market. 

That’s why you should consider looking closely at any news events from Australia, New Zealand and Japan when you prepare yourself for trading during the Tokyo session. 

You should expect movement in yen pairs as many Japanese companies are conducting business.

In the second place, keep in mind that whatever happens in China will affect the Tokyo session, so any news from China can mean more volatile moves.

With Australia and Japan relying heavily on Chinese demand, we could see greater movement in AUD and JPY pairs when Chinese data comes in.

Now let’s check out the London session.

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