USD/JPY is the second most traded currency pair globally, representing the US dollar versus the Japanese yen. The yen is considered a safe-haven currency — investors buy it during global uncertainty and sell it during risk-on periods. The Bank of Japan's ultra-loose monetary policy for decades has made the yen carry trade a fundamental force in global markets.
USD/JPY is driven by the interest rate differential between the Fed and Bank of Japan (the widest among major pairs), BoJ monetary policy shifts (yield curve control, rate decisions), US Treasury yields, Japanese government intervention threats (historically occurs above 150-155), and global risk appetite. The yen strengthens during market crashes and weakens during calm markets.
USD/JPY can trend for extended periods during rate divergence. Japanese intervention is a real risk at extreme levels — the Ministry of Finance has spent hundreds of billions defending yen weakness. The pair is highly correlated with US 10-year Treasury yields. Asian session moves often set the tone.
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Common questions about US Dollar / Japanese Yen (USDJPY=X)