"Gold Is money, everything else is credit" J.P. Morgan, 1912

USD/JPY

Long and strong trends, very tight spreads, and common Bank of Japan currency interventions

 

 

■ Forex Pair: The United States dollar (USD) against the Japanese Yen (JPY)

■ Forex Slang: YEN

■ Central Banks: FED (» visit) against the BoJ (» visit)

■ Currency Reserves: $121 billion (US) against $1,263 billion (JAPAN)

■ Population: 319 million (US) against 127 million (JAPAN)

■ GDP: $18,600 billion (US) against $4,410 billion (JAPAN)

■ DEBT/GDP: 107.5% (US) against 249.3% (JAPAN)

■ Current Account: -$484 billion (US) against +$137.5 billion (JAPAN)

 

The USDJPY is of the three most important currency pairs in the world, along with EURUSD and GBPUSD. Actually, USD/JPY is the 2nd most-traded currency pair, representing about 15% of all Forex trading activity. USDJPY is commonly used by day traders and scalpers as it is very liquid and provides tight trading spreads.

The USD and the JPY are also the 1st and 5th most held reserve currencies worldwide:

• USD accounts for approximately 62.0% of total global reserves
• JPY accounts for approximately 4.0% of total global reserves

 

USDJPY Correlation to the US Stock Markets in Six (6) Steps

It is very interesting that USDJPY is highly correlated to the US stock markets. This is a short explanation of this phenomenon:

-1- When investors are willing to buy US stocks, they tend to borrow in Japanese Yen (because of the tight JPY interest rates)

-2- Therefore, they are borrowing capital in JPY, and then selling JPY to buy USD

-3- That causes short-term demand for USD and selling pressure for JPY

-4- When investors are selling US stocks, they close their Japanese Yen borrowing liabilities

-5- Therefore, they are selling USD to buy back JPY, and repay their loans

-6- That causes increased demand for JPY and selling pressure for USD

From time to time, the dynamics of that simple mechanism can determine the USDJPY short-term exchange rate.

Find more: » Correlation Between USDJPY and Stock Indices

 

These are some key facts about USDJPY:

-The US Dollar is involved in about 85% of all currency transactions

-The Japanese Yen is involved in about 19% of all currency transactions

-In terms of GDP, the US economy is the largest in the world, and Japan’s economy is the 4th largest in the world

-Japan is the 2nd largest creditor of the United States, after China

-Japan's Public Debt / GDP is one of the greatest in the world

-Japan's currency reserves ($1.26 trillion) are the second largest in the world, after China

-Often interventions in the USDJPY market by the Bank of Japan (BoJ) (» more from Reuters)

 

Compare the USD/JPY Trading Conditions

These are some regulated CFD providers offering Forex trading, all brokers provide segregated client bank accounts and have been in the market for a period of at least 5 years.

CFD  PROVIDER	ASSET INDEX	PLATFORMS	ACCOUNT INFO	OPEN ACCOUNT
IC MARKETS Regulated: ASIC Australia   ■ ECN TRADING: YES	SPREADS: USDJPY: 0.2 pip plus trade commissions $7.0  full-traded /lot   50+ FOREX PAIRS ·Major Pairs ·Forex Crosses ·Exotic Pairs -Indices, Gold, Silver, Crude Oil, and many shares	■ MetaTrader-4 ■ MetaTrader-5 ■ cTrader ■ WebTrader ■ Mobile Traders   PAMM ACCOUNTS: YES AUTOMATED TRADING: YES (PLUS FIX/API) SCALPING: YES	$200 minimum deposit Bank Wire Credit cards Skrill Neteller WebMoney   LEVERAGE: 1:500	IC Markets is ideal for scalping and using Experts Advisors (EAs)   WEBSITE: ► Open an Account with IC Markets
DUKASCOPY Part of Dukascopy Swiss Group Regulated: MiFID, FCMC   ■ ECN TRADING: YES (SWFX MARKET)	SPREADS: USD/JPY: 0.4 pip plus trade commissions $3.5   full-traded /lot   60+ FOREX PAIRS ·Major Pairs ·Forex Crosses ·Exotic Pairs -Indices, Gold, Silver, Crude Oil, and many shares from Germany	■ Jforex Platform ■ WebTrader ■ JavaTrader ■ Mobile Traders   PAMM ACCOUNTS:  YES AUTOMATED TRADING: YES SCALPING:  YES	$100  Minimum Deposit Amount Bank Wire Credit Cards   WELCOME BONUS: 10% un a policy LEVERAGE:  1:300	Open an account via the below rebate link and get 30% discount on all commissions paid for the 1st month (automatic link): AUTOMATIC REBATE LINK: ►  Dukascopy Europe 30% Discount on all commissions   ► Review Dukascopy
FXCC Regulated: CySEC, MiFID, FCA (UK)   ■ ECN TRADING: YES	SPREADS: USD/JPY: 1.4  pip   30+ FOREX PAIRS ·Major Pairs ·Forex Crosses ·Exotic Pairs -Indices, Metals, Energy	■ MetaTrader4 ■ Sirix WebTrader ■ Mobile Traders   PAMM ACCOUNTS:  YES AUTOMATED TRADING: YES SCALPING:  YES	$100  Minimum Deposit Amount MoneyBookers Bank Wire Credit Cards WebMoney Neteller *You can withdraw your profits only via Bank Wire   BONUS: 30-100% LEVERAGE:  1:300	WEB-SITE: ►  FXCC Web   REVIEW: ► Review FXCC

 

PAIRS: EUR/USD | EURGBP | GBPUSD | USDCHF

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