Peculiarities of the Asian trading session: trading hours, stocks, assets, and currency pairs. What to consider when trading at this time of day.
When trading on the exchange, the peculiarities of the Asian trading session can affect the choice of trading strategies, risk allocation and other significant factors.
In order to use the peculiarities skillfully, it is useful for a trader to study the regularities, to understand what time the Asian trading session takes place, what assets are traded during this period, and how this period affects the quotations of various assets.
Working hours of Asian trading session
The Asian session starts from 6 PM to 3 AM Eastern Standard Time (EST).
Trading in Asia begins in Tokyo. The Tokyo Stock Exchange opens as the main center of trading, followed by all the major financial institutions in Japan.
It should be noted that trading in Asia has three centers of activity, Tokyo is the largest of them. After the opening of trading in Japan, an hour later, two trading floors, Hong Kong and Singapore, open and trading activity increases.
Although the Asian trading session is a rather quiet period in terms of market volatility, a trading system based on its peculiarities can bring traders a good profit. As a rule, trading in this time period is conducted on the major Asian stock assets and currency pairs.
Stock Market Assets
The trading period for this session coincides with the opening hours of major Asian exchanges, such as the Hong Kong Stock Exchange, Israel’s TASE, the National Stock Exchange and BSE in India, the Shanghai and Shenzhen Stock Exchanges in China, the Abu Dhabi Stock Exchange and DFM in the UAE, the Saudi Stock Exchange, Singapore’s SGX, Korea’s KRX, as well as the Japanese TSE, which is largely the market conductor for the Asian session. Also traded during this period are the Australian ASX, the New Zealand Exchange in Wellington, and the Port Moresby Stock Exchange.
Major indices traded during the Asian trading session:
- NIKKEI – a Japanese index based on the securities prices of the 225 largest-cap companies traded on the Tokyo Stock Exchange
- TOPIX is an index of securities of all companies traded on the first section of the TSE
- Hang Seng – Hong Kong Stock Exchange blue chip index
- S&P/ASX 200 – Australian index of shares of high capitalization companies traded on the Australian Stock Exchange.
Currency pairs during the Asian trading session
During the Asian session the volatility of currency pairs with national currencies of Asia, Australia and Oceania increases, but not too much, so many traders prefer to trade these pairs during this session.
Currency pairs with the Japanese yen:
- AUD/JPY – with the Australian dollar
- CAD / JPY – with the Canadian dollar
- CHF/JPY – Swiss franc
- EUR/JPY – with Euro
- GBP/JPY – with the pound sterling
- HKD/JPY – with Hong Kong dollar
- NZD/JPY – with the New Zealand dollar
- SGD/JPY – with the Singapore dollar
- TRY/JPY – with Turkish Lira
- USD/JPY – with US dollar
Pairs with the New Zealand dollar:
- AUD/NZD – with Australian dollar
- EUR/NZD – with Euro
- GBP/NZD – with the pound sterling
- NZD/CAD – Canadian dollar
- NZD/CHF – Swiss franc
- NZD/USD – with the US dollar
Currency pairs with the Australian dollar:
- AUD/CAD – with Canadian dollar
- AUD/CHF – with Swiss franc
- AUD/USD – with US dollar
EUR/AUD – with Euro
- GBP/ AUD – pound sterling
Pairs with Hong Kong dollar:
- EUR/HKD – with Euro
- GBP/HKD – with GBP
- SGD/HKD – with Singapore dollar
- USD/HKD – against the US dollar
Volatility also increases for currency pairs CHN/USD, CHN/RUB, EUR/SGD, GBP/SGD, and USD/SGD. These pairs are the main focus of traders during the Asian session.
Peculiarities of trading during the Asian trading session
The Asian session is considered the calmest trading period, most suitable for beginners. However, in addition to the absence of sharp jumps in quotations, there are other features of this session.
Another feature of the Asian trading session is the presence of a “shadow movement” which can sometimes be seen during the analysis of events that took place over the weekend.
On Monday, the opening of the Asian session takes place after the weekend break, due to which the session begins with a gap trade. Exactly at this moment, the market can close the “gaps” (GAP) or create new ones.
At the same time, on the chart, there is a formation of trends, formed by the news, which came out over the weekend. On other days, the activity at the Asian session is usually lower. However, on other days Asian traders often set the trends for the whole trading day, which are then supported by the European and American players.
The main players during the Asian session are the Japanese Central Bank, as well as large companies. Japanese and Chinese economies are export-oriented, which explains the high activity of their companies in foreign exchange deals.
Also, during the Asian markets, it is often possible to observe significant deviations in the Yen.
This is due to the activity in the country, namely the implementation of currency interventions of the Japanese Central Bank. Since 16% of all transactions on Forex are carried out with the Yen, it cannot but affect the related currency pairs.