USD/JPY (U.S. Dollar/Japanese Yen)

DEFINITION of 'USD/JPY (U.S. Dollar/Japanese Yen) '

The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) pair or cross for the currencies of the United States (USD) and Japan (JPY). The currency pair shows how many Japanese yen (the quote currency) are needed to purchase one U.S. dollar (the base currency).

Trading the USD/JPY currency pair is also known as trading the "gopher".

BREAKING DOWN 'USD/JPY (U.S. Dollar/Japanese Yen) '

The value of the USD/JPY pair is quoted as 1 U.S. dollar per x Japanese yen. For example, if the pair is trading at 1.50 it means that it takes 1.5 yen to buy 1 U.S. dollar.

The USD/JPY is affected by factors that influence the value of the U.S. dollar and the Japanese yen, both in relation to each other, and to other currencies. For this reason, the interest rate differential between the Federal Reserve (Fed) and the Bank of Japan (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 U.S. dollar 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.

The USD/JPY tends to have a positive correlation with the USD/CHF and USD/CAD currency pairs because they all use the U.S. dollar as the base currency.

RELATED TERMS
  1. Currency Pair: EUR/USD (Euro/U.S. ...

    The abbreviation for the euro and U.S. dollar (EUR/USD) pair ...
  2. USD/CAD (U.S. Dollar/Canadian Dollar)

    The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) ...
  3. Dollar Rate

    The exchange rate of a currency against the U.S. dollar (USD). ...
  4. Reciprocal Currency

    In the foreign exchange market, a currency pair that involves ...
  5. AUD/USD (Australian Dollar/U.S. ...

    The abbreviation for the Australian dollar and U.S. dollar (AUD/USD) ...
  6. JPY (Japanese Yen)

    The currency abbreviation or the currency symbol for the Japanese ...
Related Articles
  1. ETFs & Mutual Funds

    FXY: Should You Short the Yen?

    Discover several reasons why investors may profit from short selling the Japanese yen against the U.S. dollar.
  2. Markets

    Yen: The Safest Play Amid Brexit and Fed Rate Volatility (JPY)

    Why the Japanese yen has emerged as the safest haven for currency traders in the current economic situation.
  3. Trading

    The U.S. Dollar And The Yen: An Interesting Partnership

    In order to make the USD/JPY relationship more understandable, we must look at the yen in terms of treasury bonds.
  4. Trading

    4 Of The Most Popular Traded Currencies

    Every day, trillions of dollars trade in the forex market. Here are a few of the most popular currencies, and some characteristics for each.
  5. ETFs & Mutual Funds

    Top 3 Japanese Yen (JPY) ETFs (FXY, YCL)

    Find out about currency exchange-traded funds, and learn about some of the best available ETFs that are focused on the Japanese yen.
  6. Trading

    How Do You Make Money Trading Money?

    Making money in the foreign exchange market is a speculative process. You are betting that the value of one currency will increase relative to another.
  7. Trading

    Top 6 Most Tradable Currency Pairs

    The most frequently traded currency pair is the euro/U.S. dollar. The euro is the base currency in the pairing, while the dollar is the quote currency.
  8. ETFs & Mutual Funds

    3 Strategies to Mitigate Currency Risk (EUFX)

    Discover the often overlooked risk known as currency risk, and learn three strategies to mitigate or eliminate it in your portfolio.
  9. Markets

    What Makes the EUR/USD A Risky Trade Now?

    What are the current risks of trading the EUR/USD pair? The Fed may raise interest rates this summer and the ECB has begun a quanitative easing program.
  10. Trading

    What is an Indirect Quote?

    An indirect quote expresses the amount of foreign currency required to buy or sell one unit of the domestic currency in the foreign exchange markets.
RELATED FAQS
  1. How often do exchange rates fluctuate?

    Exchange rates float freely against one another, which means they are in constant fluctuation. Currency valuations are determined ... Read Answer >>
  2. How can I trade in cross currency pairs if my forex account is denominated in U.S. ...

    The forex market allows individuals to trade on nearly all of the currencies in the world. However, most of the trading is ... Read Answer >>
  3. Why is currency always quoted in pairs?

    When reading currency quotes, you have probably noticed that there is only a single quote for a pair of currencies. Currency ... Read Answer >>
  4. How do you lose money in the Forex market?

    All trades made in the forex market are made in pairs. In other words, one currency is always quoted against another currency, ... Read Answer >>
  5. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  6. What is the value of one pip and why are they different between currency pairs?

    In forex markets, currency trading is done on some of the world's most powerful currencies. The major currencies traded are ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center