USD/JPY News & Analysis

Recent USD/JPY Forex News

Yen Demand Gaining Momentum

We've seen USDJPY under pressure in recent weeks and those setbacks are starting to accelerate.

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The Writing on the Wall

The Dollar has rally has extended well past where I had anticipated it would ...

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The Zen in the Yen

It's been difficult reading markets, and yet, this major pair has managed to ...

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Major Markets and Reversal Levels

Here's a look at the major markets and what levels need to get broken to forc...

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Euro Weakness Overstated

The Euro has come under pressure in recent weeks, but overall, there is still...

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Strange Price Action

Here's an interesting correlation break that I've noticed in the market over ...

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Dashboards Confirming

A lot of talk about tight conditions and lack of volatility and all this can ...

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The US Dollar cross with the Japanese Yen (USD/JPY) currency pair is one of the most important pairs to watch and is also one of the most actively traded. This pair is used a lot as a barometer for global risk sentiment given the traditionally low interest rate policy in Japan, which acts as an incentive for investors to fund investments via the lower yielding Yen into higher yielding currencies.

While the US economy is viewed as the largest and most sophisticated and stable economy in the world, the Japanese economy is less stable and very much dependent on its export economy, which means the Japanese economy also benefits from a weaker currency. But if you're looking to make a play on risk sentiment, you would be inclined to buy this pair when risk appetite is strong, because many will be selling Yen to buy higher yielding riskier investments. Meanwhile, if risk appetite wanes, there will be a flow of funds out of the higher yielding, riskier currencies and back into the Yen, which would making selling the major pair the common play in this scenario.