USD/JPY: the dollar-yen pair and the carry trade

What it is

USD/JPY compares the US dollar with the Japanese yen. It is one of the most traded pairs and is very sensitive to US government bond yields and Bank of Japan policy.

The pip

On this pair the pip is the second decimal place (0.01). The dollar value of a pip depends on the exchange rate: with USD/JPY around 150 it's worth about $6-7 per standard lot.

What moves it

• The rate differential between the Fed and the BoJ and US government bond yields
• Decisions and interventions by the Bank of Japan and the Japanese government
• Risk sentiment: the yen is a safe-haven currency and yen carry trades close in moments of fear

When to trade it

It's active during the Asian session and in the London-New York overlap. It can have abrupt moves around BoJ decisions or exchange-rate interventions.

Live chart