USD JPY (Dollar to Yen)

USD/JPY the currency pair shows how many Japanese yen are needed to purchase one U.S. dollar.

Technical Analysis USD JPY

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What is Forex and how does Forex trading work?

Forex trading (also commonly known as Foreign Exchange, currency or FX trading) is a global market for trading one country’s currency in exchange for another country's currency. It serves as the backbone of international trade and investment: imports and exports of goods and services; financial transactions by governments, economic institutions or individuals; global tourism and travel – all these require the use of capital in the form of swapping one currency for a certain amount of another currency.

When trading Forex CFDs, you are essentially speculating on the price changes in their exchange rate. For example, in the EUR/USD pair the value of one Euro (EUR) is determined in comparison to the US dollar (USD), and in the GBP/JPY pair the value of one British pound sterling (GBP) is quoted against the Japanese yen (JPY).

If you think the exchange rate will rise you can open a ‘Buy’ position. Conversely, if you think the exchange rate will fall you can open a ‘Sell’ position.

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To start trading commodities with Plus500, simply:

  1. Sign up / Log in to your account.
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Dollar Yen. USD JPY

USD/JPY is the abbreviation used to denote the currency exchange rate for the U.S. dollar and Japanese yen. The currency pair shows how many Japanese yen (the quote currency) are needed to purchase one U.S. dollar (the base currency). The symbol for the Japanese yen is ¥.

Understanding USD/JPY (U.S. Dollar/Japanese Yen)

The value of the USD/JPY pair is quoted as one U.S. dollar per a certain amount of Japanese yen. For example, if the pair is trading at 150 it means that one U.S. dollar can be exchanged for 150 Yen. Given that the Japanese yen is also widely used as a reserve currency just like the US dollar, the USD/JPY exchange rate is one of the most liquid and traded currency pairs in the world.

The USD/JPY is affected by factors that influence the value of the U.S. dollar and the Japanese yen, both in relation to each other and to other currencies. For this reason, the interest rate differential between the Federal Reserve (FED) and the Bank of Japan (BOJ) will affect the value of these currencies when compared to each other. For example, when the FED intervenes in open market activities to make the U.S. dollar stronger, the value of the USD/JPY cross could increase, due to a strengthening of the U.S. dollar when compared to the Japanese yen.

The USD/JPY tends to have a positive correlation with USD/CHF because, aside from the fact that they both use the U.S. dollar as the base currency, the Swiss franc is the other currency that has a safe haven status with investors. On the flip side, USD/JPY is negatively correlated with gold. As USD/JPY fell during the crisis, gold prices soared.