USD JPY Investing
Minimum spread- 0.3
Typical spread- 1.5
Minimum nominal trade size- 1000
Overnight interest (annual) sell- -1.50%
Overnight interest (annual) buy- -0.80%
Trading hours (GMT) – 24*5
USD/JPY is the ticker that represents the strength of the Japanese Yen against the U.S dollars. This pair is also known by the name of “Ninja” because of the popular heroic character ninja, which originated in Japan. USD/JPY is one of the major forex currency pairs in the forex market. It is preferred by most of the traders because of its higher liquidity as it is one of the second most liquid currency pairs after USD/JPY.
USD/JPY is a currency pair representing the American dollar expressed in Japanese Yen. The Yen is the national currency of Japan. Yen is on the fourth rank for the international mutual settlement by the international monetary fund. The symbol for the Japanese yen is “¥.”
The currency is issued and regulated by the Bank of Japan, which was established in 1882. As we know, the U.S dollar is the primary currency for the forex reserve, but there was a time in the 1980s when Japanese yen was the front runner for that position. However, due to a series of financial and economic downfall, yen never achieved that position. However, still, it is the dominant currency in the forex market and holds the fourth position for the largest reserve-held currency.
Historic Highs and Lows for USD/JPY
The popular Forex pair USD/JPY made an all-time high of 360.0 in December 1970 and an all-time record low of 76.64 in October 2011. For the current financial year, the pair made a high of 112.08 and a record low of 105.28 with a total net change of 0.93%
Understanding the USD/JPY price
The rule to read the price quote is similar to any other pair. In USD/JPY, the dollar represents the base currency in relation to the Japanese yen. Thus when the USD/JPY rally, that means the U.S dollar is gaining strength over the Japanese yen, and the dollar loses its strength when USD/JPY falls. The price quote of USD/JPY means the amount of Japanese yen, which is equivalent to one dollar. For example, when USD/JPY quotes 108.6 prices, it means one dollar is equivalent to 1.3152 Japanese yen.
Key Factors to keep in mind while trading USD/JPY
Monetary Policy Impact
The interest rate of the Bank of Japan directly affects the exchange rate of the Japanese currency. The time and date of bank meetings are known in advance. Usually, this is January and the last two months of each quarter. Trades try to anticipate the interest rate decision before the meeting, which causes a significant surge in the volatility.
The Federal Reserve is also an important body which often followed by traders to anticipate the price movement. The Fed is an independent supervisory federal agency that includes 12 reserve banks in different states, which in turn have thousands of commercial banks. The Fed revises the Federal funds rate eight times a year.
The economic calendar offers a significant amount of information. Some of the most important data are:
- CPI-consumer Price Index
- GDP– gross domestic product
- PMI– purchasing managers index
- Trade balance
- GDP –gross domestic product
Why trade in USD/JPY with CAPITAL STREET
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- Safety of funds