USD/JPY Exchange rate
Editors’ Picks
AUD/USD: Further losses retarget the 200-day SMA
Further gains in the greenback and a bearish performance of the commodity complex bolstered the continuation of the selling pressure in AUD/USD, which this time revisited three-day lows near 0.6560.
EUR/USD: Further weakness remains on the cards
EUR/USD added to Tuesday’s pullback and retested the 1.0730 region on the back of the persistent recovery in the Greenback, always against the backdrop of the resurgence of the Fed-ECB monetary policy divergence.
Gold flirts with $2,320 as USD demand losses steam
Gold struggles to make a decisive move in either direction and moves sideways in a narrow channel above $2,300. The benchmark 10-year US Treasury bond yield clings to modest gains near 4.5% and limits XAU/USD's upside.
Bitcoin price dips to $61K range, encourages buying spree among BTC fish, dolphins and sharks
Bitcoin (BTC) price is chopping downwards on the one-day time frame, while the outlook seen in the one-week period is a horizontal trade. In this shakeout moment, data shows that large holders are using the correction to buy up BTC.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.
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USD/JPY
USD/JPY is the abbreviation for the U.S. dollar and Japanese yen cross. Trading this currency pair is known as the "gopher". The USD/JPY tends to have a positive correlation with the USD/CHF and USD/CAD, they all use the U.S. dollar as the base currency. The Yen is sensitive to factors related to Asian stock exchanges and due to the interest rate differential with other major currencies, it is also sensitive to any change affecting the so-called "Carry Trade".
HISTORICAL HIGHS AND LOWS
- Fixed Rate: (from 1944 to 1971) After World War II, the Yen lost its value. To stabilize, the exchange rate of it was fixed at ¥360 per $1 as part of the Bretton Woods system that set an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to gold.
- Free Float Rate: When the Bretton Woods system ended in 1971, the USA terminated convertibility of the US dollar to gold. The JPY became undervalued and was allowed to float. Since then, the pair reached its highest price in January 1973 at 301.15¥/USD and its minimum in October 2011 at 72¥/USD.
USD/JPY FORECAST 2024
The Yen could receive support from the BoJ if it indicates a shift toward ending its ultra-loose monetary policy stance, potentially through a rate hike that would mark the end of seven years of negative rates. Governor Ueda and Deputy Governor Hino offered some comments about it in December. Rumors and speculations in that direction would trigger momentum for the Yen. Read more details about the forecast.
MOST INFLUENTIAL CURRENCIES FOR USD/JPY
The USD/JPY pair can also be impacted by other currencies, in particular the Euro (for being a prominent commercial partner) and the Chinese Yuan Renminbi (for being the other main Asian currency).This group also includes EUR/USD,GBP/USD, AUD/USD, USD/CHF, NZD/USD, USD/CAD, GBP/JPY and EUR/JPY
MOST INFLUENTIAL ORGANIZATIONS FOR USD/JPY
The organizations that most impact the USD/JPY are the Federal Reserve of the United States and the Bank of Japan (BoJ).
- About the Fed: The Federal Reserve System is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises.
- About the BoJ: The Bank of Japan is the central bank of Japan. The bank is often called Nichigin for short. The Bank's objectives are to issue banknotes and to carry out currency and monetary control and to ensure smooth settlement of funds among banks and other financial institutions, thereby contributing to the maintenance of the stability of the financial system.
The interest rate differential between the Fed and the 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 USD 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.
In Japan, deflation has been a persistent threat for many years, and the BOJ has pursued a policy of very low rates in the hopes of stimulating demand and economic growth; at various points in the 2000s, real rates in Japan were actually slightly negative.
The US Government is as well an institution of great importance for this pair: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it. The same happens of course for the Japanese Government, in particular, all the speeches of the Primer Minister Fumio Kishida, who replaced Yoshihide Suga in October 2021.