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The Australian Dollar cross with the Japanese Yen (AUD/JPY) currency pair is often used when traders are looking to play a higher yielding developed currency against a lower yielding funding currency. Market environments that are heavily sensitive to global sentiment will generally translate into a good amount of volatility for this pair. When sentiment is strong, it generally correlates with a higher rate, while deteriorating sentiment will have a weighing influence.
The Australian economy is a commodity rich economy which means it's a currency correlated to the direction in commodities prices. Australia is focused on shipping energy products and ferrous metals.The Australian Dollar is also highly correlated with China given its dependence on the emerging market economy, which means it is a risk correlated currency. Meanwhile, the Japanese economy has been historically viewed as a safe haven economy, mostly because of its traditional low yield that incentivizes investors to borrow Yen at very low rates and invest in higher yielding currencies like the Australian Dollar to benefit from the attractive yield differential. This is also known as the 'carry trade.' So if you’re looking to make a currency play that is tied to the direction in risk, the AUDJPY cross rate could be the way to go.