US Dollar/Japanese Yen - USD/JPY

USD/JPY Background

The USD/JPY is the second most traded currency pair in the world, only the EUR/USD has a higher trade volume. Traditionally seen as a bellwether for the health of the wider Asian economy, the USD/JPY is heavily influenced by economic developments in the USA and Japan and its neighbours – especially China. Since US-Asian economic ties are the driver of the global economy, the USD/JPY is often seen as an indicator of broader global economic health.

The JPY and the USD are both haven currencies, so this pair often features less volatility than other major pairs, which may put off some traders. The price movement of the USD/JPY is usually most active between the Asian open and the European open. Because it is so heavily traded, spreads on the USD/JPY are usually very tight – sometimes lower than 1 pip.

Common events that affect the price movement of the USD/JPY are major announcements on interest rates by the Bank of Japan and the Federal Reserve and the release of economic data that measures the economic health of Asia and the USA. USD/JPY is especially popular with institutional traders, banks, and multinational corporations. It is often used for hedging purposes, offsetting currency risk for manufacturers and multi-national exporters and importers.

The table below shows the Forex brokers with the lowest trading costs for USD/JPY, including the spread and commission. It also details the industry average spread and industry average trading cost for 1 lot of USD/JPY.