Best Pairs to Trade During the Tokyo Session in 2025

Each forex pair behaves differently, depending on the trading session you try to trade it. The Tokyo session, also known as the Asian Session, has some nuances that make it suitable for specific pairs and traders.

In this piece, we’ll show you the best forex pairs to trade during Tokyo session. We’ll also show you what peculiarities the Tokyo session has, and why these pairs are most suitable for the Tokyo session.

When is the Tokyo Session?

The Tokyo trading session, also known as the Asian session, is the first major foreign exchange trading session of the 24-hour trading day. It operates between 12:00 AM and 9:00 AM GMT (or 7:00 PM and 4:00 AM EST). 

Remember we mentioned that it’s also called the Asian session. As a result, the Japanese economy isn’t the only major influence here. Other major players in the region include China, Singapore, Australia, and New Zealand (despite the last two not being in Asia).

The Best Pairs to Trade During the Tokyo Session

Below is an in-depth look at the top forex pairs to trade during the Tokyo market session and the reasons they excel in the session.

1. USDJPY (US Dollar / Japanese Yen)

The USD/JPY is the most actively traded pair during the Tokyo session, owing to Japan’s economic significance and role as a global export powerhouse. The yen and the dollar are among the top-traded currencies globally. The spike in activity begins when the Japanese equity market opens.

The USDJPY pair reacts strongly to Japanese economic data (e.g., BOJ decisions, GDP, or inflation reports).

2. AUDUSD (Australian Dollar / US Dollar)

The Australian dollar is highly active during the Tokyo session due to overlapping trading hours with the Sydney market. Not only do Australian economic activities, such as the employment numbers or RBA, affect the pair, but the country’s heavy reliance on commodity exports (iron ore, gold) means the pair reacts to changes in commodity prices.

Keeping an eye on commodity market movements and Chinese economic data, as China is a key trading partner for Australia, can help you trade this pair effectively.

3. NZD/USD (New Zealand Dollar / US Dollar)

The NZD/USD pair shares similarities with AUD/USD but has its own dynamics, making it a strong contender for Tokyo session traders. The pair reacts to New Zealand’s economic data and Reserve Bank of New Zealand (RBNZ) announcements. And because the country’s  economy is heavily tied to agricultural exports, including dairy and meat, these commodities can also affect the movement of the NZDUSD

4. EURJPY (Euro / Japanese Yen)

The EUR/JPY is a popular cross pair that experiences steady activity during the Tokyo session. The reason for this is not far-fetched. After the Tokyo session, the London Session is the next major session to open. So, whatever happens during the Tokyo session is used to guide traders’ actions in the London session.

Having said that, the pair is not the most active during the London session. However, EUR/JPY offers moderate price movements, making it attractive to experienced traders.

5. AUDJPY (Australian Dollar / Japanese Yen)

This cross pair combines the dynamics of the Australian dollar with the Japanese yen, making it an exciting option for the Tokyo session. However, the pair is a favorite among swing and position traders who want to benefit from its carry trade popularity (the interest rate differential between Japan and Australia).

The Best Forex Pairs to Trade During the Overlap Between Tokyo and Other Sessions

Overlaps in forex trading occur when two major sessions are open simultaneously. These sessions are known for their extra volatility because they benefit from the activities of two trading sessions.

The Tokyo session overlaps with the Sydney and London sessions. Therefore, the AUD, NZD, and GBP pairs record increased activity during this overlap.

1. Tokyo-Sydney Overlap (12:00 AM to 3:00 AM GMT)

This overlap occurs at the start of the Tokyo session when the Sydney market is still active. The shared focus on Asia-Pacific currencies makes this overlap ideal for trading pairs tied to the region. The AUD/JPY is the first pair to come to mind during this overlap. The NZDJPY, AUDUSD, and USDJPY are other active pairs during the Tokyo-Sydney overlap.

2. Tokyo-London Overlap (7:00 AM to 9:00 AM GMT)

This overlap occurs as the Tokyo session winds down and the London session begins. It marks a transition from low-volatility trading to the higher volatility typical of the London session. The pairs that see a boost in market activity during this overlap include the EURJPY, GBPJPY, AUDJPY, and, of course, the USDJPY.

One of the key differences between these two Tokyo overlap sessions is the trading strategy that befits each. The Tokyo-Sydney overlap, for instance, is great for range trading. This way, you can capitalize on the range-bound movement of the pairs during the session. However, the high volatility that ushers in the London session means you can prepare for breakout trading strategies due to the Tokyo-London overlap. 

Talking about trading strategies, let’s check out the best trading strategies for the Tokyo session:

What are the Best Trading Strategies for the Tokyo Session?

The Tokyo session offers unique trading opportunities with relatively lower volatility, steady price movements, and concentrated activity in Asia-Pacific currency pairs. Let’s examine the most effective trading strategies during this session.

1. Range Trading Strategy

The Tokyo session is known for tight trading ranges due to limited global market participation and subdued volatility compared to the London or New York sessions. This makes range-bound strategies particularly effective.

Trading it is simple. Identify support and resistance levels where the price frequently reverses. Use oscillators like the Relative Strength Index (RSI) or Stochastic RSI Oscillator to confirm overbought or oversold conditions. Enter a buy position at support and a sell position at resistance. Place stop-loss orders slightly outside the support or resistance levels to protect against false breakouts.

Avoid trading during news events, though, as they can break the range. The USDJPY, AUDJPY, and the EURJPY are pairs you can try strategy on.

2. Breakout Trading Strategy

While most of the Tokyo session is quiet, significant breakouts can occur during market openings, news releases, or Tokyo-London overlaps. You trade this by marking the range during the first few hours of the session. Place buy-stop and sell-stop orders slightly above and below the range, respectively. Breakout trading strategies works well on the USDJPY and the GBPJPY.

3. News Trading Strategy

The Tokyo session frequently sees market movements driven by regional economic data, such as Japanese GDP figures, BOJ announcements, or Australian employment reports. To take advantage of this strategy, stay updated on economic calendars and schedule trades around major news releases. Use pending orders to enter positions in the direction of expected price movement. Try this strategy on the AUDUSD, NZDUSD, and USDJPY.

4. Carry Trade Strategy

The Tokyo session is a prime time for carry trades, as interest rate differentials between currencies like the Australian dollar (AUD) and Japanese yen (JPY) drive long-term investment flows. The trick is to buy high-yielding currencies like JPY, AUD, or NZD and sell low-yielding currencies like JPY.

5. Trend-Following Strategy

Although the Tokyo session often exhibits subdued volatility, consistent trends can emerge, especially in currency pairs like USDJPY or AUDUSD. You can use any of our moving average strategies to follow and trade this trend.

6. Risk-Off Sentiment Strategy

The Yen is a safe-haven currency, meaning it strengthens during periods of global risk aversion. Traders can capitalize on this during the Tokyo session when risk-off sentiment drives market movements. Look for global geopolitical or economic events triggering a risk-off environment and enter long positions in JPY against riskier currencies (e.g., AUD, GBP)

What are the Major Influencers of the Tokyo Session?

The following factors largely influence the Tokyo session:

1. Bank of Japan (BoJ) Policy Impact

The BoJ’s monetary policy, particularly yield curve control and interest rates, creates significant market movements. Their intervention history in currency markets makes traders highly sensitive to BoJ statements or hints of action. We had one that happened as recently as April 2024.

2. Japanese Economic Data Releases

Examples of Japanese Economic Data Releases that affected the market in that session include trade balance data, industrial production figures, the consumer price index, and the Takan Survey. Any of these can drive or instigate significant market reactions. 

3. Corporate Money Flows

These include the Japanese corporations’ repatriation of overseas earnings, especially around fiscal year-end (March). Major Merger & Acquisition activities involving Japanese companies also create substantial currency movements.

4. Political and Geopolitical Factors

With the Japanese Yen being a safe-haven or risk-off currency, regional geopolitical tensions often affect its demand and supply flow. Trade relationships and tensions, particularly between China and the US, also affect the Asian session.

5. Regional Economic Interconnections

In addition to the major Japanese influence, Chinese, Australian, Korean, and Taiwanese economic activities also affect the movement of prices during the Tokyo session. The Chinese economic data and policy decisions create ripple effects across Asian currency markets. And because of the Australian-Chinese trade links, the effect on AUD is significant.

What are the Main Characteristics of the Tokyo Session?

Trading hours, liquidity, the major players in the session, and traders’ preferred trading strategies are what make the Tokyo session peculiar. 

1. Trading Hours

The Tokyo session operates between 12:00 AM and 9:00 AM GMT (or 7:00 PM to 4:00 AM EST). During this time, liquidity often spikes when the session opens and then peaks during the overlap with the Sydney session.

Having said that, though, the Tokyo session generally has lower overall volume compared to London/New York sessions.

2. Major players

The Tokyo session is dominated by Japanese and Asian institutional investors. Regional central banks are also active in managing their currencies. Expect some volatility whenever important news releases from these countries occur.

3. Most common trading strategies

As a result of the range-bound conditions, traders focus more on technical analysis when approaching the Tokyo session. These technical strategies may include simple support and resistance trading, breakout trading, and trend trading.

The low BOJ interest rate also exposes the Yen to carry trades against other currencies with higher interest rates, such as the NZD and the AUD.

Why Should You Trade Some Pairs at Some Specific Times?

Liquidity and Timing!

Liquidity, which refers to the ease of cash flow in and out of the market, is what drives the forex market. So, when liquidity is high, the prices are more likely to move. And as you may know, the movement of price is where we make our money as forex traders. 

With liquidity in mind, you want to trade when the market is likely to move. The market moves when the players are active, and when are the players active? During their trading sessions.

That’s why you’ll notice that USD pairs are most active during the New York session, and the GBP pairs are very active in the London session. 

By the way, do you know what pairs to trade during the London session? What about the New York session? Do you know what pairs to trade at that time?