The US is one of Japan's biggest trading partners meaning the Yen is highly sensitive to US demand for Japanese electronics and cars.

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Interesting facts

USD/JPY represents the amount of Japanese yen that can be purchased with one US dollar. At the time of the Breton Woods System the yen was fixed to the US dollar at JPY360 per USD1, but the exchanged only lasted until the US abandoned the gold standard in 1971.  Since then the yen has appreciated significantly against the US dollar. The yen is the third most traded currency in world, behind the US dollar and the euro.

Spreads from Mon-Fri open Leverage up to
1.3 pts 24 hrs 400:1

Price drivers

USD can be influenced by labour market data (in particular NFP results and the level of unemployment), GDP and inflation data, interest rates and the Fed. Lately, quantitative easing, or the possibility of it, by the Fed and the notion that the US dollar may be a safe haven has factored into investors decisions when trading USD. The yen is also sometimes thought of as a safe haven trade, and the currency is sometimes hit with repatriation flows during times of economic crisis. Also, domestic data has an impact on the price of JPY, especially trade balance, inflation, employment and GDP data.