5 Best Currency Pairs to Trade During Asian Time

Unlike the London and New York sessions, which are responsible for approximately 58% of all forex trades, the Asian session drives fewer trades, about 20%, but sometimes features better trading opportunities. This article explores all you need to know about trading during Asian trading hours, including the top five currency pairs to trade.

Understanding Asian Trading Session 

The Asian session, also known as the Tokyo session, opens at 7:00 PM and closes at 4:00 AM EST. In local time, it’s roughly 9:00 AM to 6:00 PM Tokyo time and 8:00 AM to 5:00 PM Singapore time. Although the Japanese yen is the third most traded currency in the forex market, Singapore and Hong Kong are ahead of Japan in terms of trading volume. The major forex trading markets open during Asian time include the Tokyo Stock Exchange (Japan), Hong Kong Stock Exchange, Shanghai Stock Exchange (China), Singapore Exchange, and Korea Exchange (Seoul).

Trading activity during Asian time is primarily driven by commercial companies heavily invested in exports and by central bank policies. With China being a world economic superpower and a major trade player, thousands of trades take place during the Asian session every day. However, you'll sometimes find periods when liquidity is low. During these periods, price usually falls into a range, providing scalp traders with ample trading opportunities. Day traders can also capitalize on these low-liquidity periods by predicting potential breakouts.

The Asian time is the first trading session of the day, so many times it influences the direction of trades in the following sessions. Since it starts the day following the New York session, closing the previous day, you may see a number of consolidation patterns in the Asian session. Overall, the Asian session delivers calmer and more structured price action compared to other sessions.

5 best currency pairs to trade during Asian Time

The Asian session has about 10 primary currency pairs, but cross pairs can be as many as 40. The best five to trade based on liquidity are USD/JPY, AUD/USD, AUD/JPY, NZD/USD, and USD/CNH. 

USD/JPY 

The USD/JPY is the most traded currency pair during Asian trading hours. Factors affecting the U.S. and Japanese economies significantly influence this pair. For instance, an interest rate adjustment announcement by the Federal Reserve or the Bank of Japan can have a major ripple effect on the pair’s volatility. If you rely primarily on technical analysis and price action, trading USD/JPY may prove turbulent, especially during market crises. This is because the pair responds quickly to economic news updates. The Japanese yen tends to appreciate during market crises, prompting investors holding foreign assets to sell their U.S.-denominated holdings for yen. Conversely, when global markets are calmer, investors may buy the dollar, which offers higher yields, rather than the low-interest Japanese yen. Understanding these dynamics can help guide the direction of your trades. 

AUD/USD

The AUD/USD is another top-traded currency pair during the Asian session. With Australia being the world's largest iron ore exporter and the second-largest exporter of coal, the movement of the Australian dollar depends heavily on commodity prices. Trading AUD/USD requires staying on top of commodity-related events. For example, during the commodity slump of 2015, oil prices hit decade lows and coal prices dropped, causing the AUD to fall sharply, more than 15% against the U.S. dollar. Additionally, the interest rate differential between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed) also influences the exchange rate between the AUD and the USD.

AUD/JPY

The AUD/JPY is another currency pair popular among Asian session traders. The pair is heavily influenced by both Australian economic data and Japanese market developments. Because Australia’s trading day overlaps fully with the Asian session, local releases can generate significant volatility. Watch out for economic data releases. For example, if Australia publishes strong commodity export data, you may see bullish pressure on AUDJPY. Conversely, strong Japanese economic data can lower the buying pressure on AUDJPY. Generally, the AUD/JPY is often more volatile than AUD/USD or USD/JPY. 

NZD/USD

NZD/USD tends to move similarly to AUD/USD but shows a slightly different market volatility pattern. Economic data from New Zealand, such as the country’s growth rate and interest rate, can trigger steady directional moves. Because liquidity is thinner compared to major European pairs, you might experience more predictable trends. If you prefer moderate volatility without extreme spikes, NZD/USD can be suitable during this session.

USD/CNH (offshore)

USD/CNH, the offshore Chinese yuan pair, shows significant movement when Chinese economic data or policy statements are released. You may find that spreads on this pair are wider compared to major pairs. This means you'll sometimes encounter lower liquidity and higher volatility while trading. USD/CNH is a good choice for range trading, as breakouts are less likely to occur. If you follow Chinese macroeconomic trends and news closely, you may find strategic breakout opportunities during the Asian session. However, it requires careful risk management and liquidity considerations.

Key Takeaways Before You Trade the Asian Session

Before trading the Asian session, it’s important to note that volatility and liquidity are generally lower than what is seen in the New York or London sessions. You'll need to match your trading strategy to the session patterns. If you are a breakout trader, focus on session opens. But if you prefer range trading, identify clear support and resistance zones established during quieter hours. Overall, you'll find currency pairs during the Asian session that work for various trading strategies.