What’s the correction below the employment statistics?! USD/JPY breaks below 145 yen! What is a trading strategy that isn’t influenced by statistical data?
Hello, I’m Neko-yaki from Trade Idea Lab. Today, about the intradaythe dollar/yen plunge has the market buzzingaside from that, the reason is a downward revision of the US jobs report. However, let me add one word here.“In the first place, the statistics released by governments around the world are all a sham.”
This may be a shocking opinion, but from my years of trading experience, I can say with near certainty that this is almost true. Governments around the world, including Japan, manipulate statistical data to make their economies look better,to some extentand this manipulation happens behind the scenes where our eyes cannot see.
Can we trust government statistics?
First, consider Japan’s statistics. The Japanese government often releases economic indicators, but revisions and data changes are not rare. For example, unemployment rate, GDP growth, and the consumer price index are often revised afterwards, and those revisions reflect numbers adjusted to fit the government’s convenience.
And this isn’t a Japan-only matter. In the United States too, stats such as employment figures may be revised downward, inflation may come in lower than expected, or GDP growth may be unexpectedly high. Are these data truly trustworthy?
Honestly, it is difficult to believe. Governments use various means to adjust statistics to support their economies. This is part of election tactics and maintaining international credibility, and it’s natural that statistics are adjusted to fit circumstances.
Be especially wary of Chinese statistics
And given this,Chinese statistical data are even less reliableThe Chinese government operates within a highly centralized system, and it is widely known that statistics are manipulated to meet national targets. For example, data like GDP growth and unemployment are often adjusted to align with government-set goals.
Thus, while markets around the world can be heavily influenced by Chinese statistics, blindly trusting them carries high risk.
That’s why we do not trade on indicator release days
As discussed, government-released statistics are often not trustworthy. That’s why we avoid trading on the days when indicators or statistics are released. Especially on release days for employment data or GDP, when the market islikely to move significantly. This is very risky.
Because the impact of statistics on the market is unpredictable. Even if you have a “perfect trading strategy,” markets can react in unexpected ways when statistics are released. For example, the current dollar/yen plunge is attributed to downward revisions in the US jobs data, but no one could have predicted that movement.
Dollar/Yen fell to 145.95 in the futures
Now, let’s look at the dollar/yen movement this time. It fell in futures to 145.95, due to the downward revision of the US jobs data. It happened because the employment data were worse than expected, leading to selling of the US dollar. But this is just one example of how statistics influence markets, andwe actually knew the real reason for the declineas mentioned in the previous article.
Many traders might say they “predicted it” or that it was “within expectations” after seeing this move, but the truth is that predicting such sharp moves in advance is nearly impossible. In particular, predicting how government-released statistics will be revised and how those revisions will affect the market is astronomically unlikely. We’re different.We can use futures and options to know in advance the actions of those moving the marketand foresee their moves.
Conclusion: Traders should stay calm
This recent dollar/yen plunge was due to downward revisions in US employment data, but this should be treated as a lesson. The most important thing for a trader is to remain calm. Do not overreact to government statistics, and calmly analyze how they may affect the market.
And most importantly, do not trade on the days statistics are released. This is basic risk management. Especially on days when there is a high likelihood of unexpected moves, as in this case, the best approach is to step back and avoid trading.On days when unexpected moves are likely, abstaining from trading is prudentfollowing this proverb is the best strategy.
That’s all for today’s thoughts on the dollar/yen plunge and the downward revision of US employment data. Traders, don’t be swayed by statistics; maintain calm judgment.
#EmploymentStatistics #USDJPY #DollarYen #DownwardRevision
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