USD/JPY

USD/JPY, otherwise known as the gopher, is the second most heavily traded currency pair in the world. Japan is one of the world’s largest net exporters while the US is the world’s largest net importer. It currently accounts for a fifth of the average daily turnover of the global foreign exchange market. Both the Japanese yen and the US dollar are used as reserve currencies, making them highly liquid. While the forex market is active around the clock on weekdays, there are certain times when specific currency pairs become considerably more active. Many experts believe that the best time to trade the USD/JPY forex pair is when the US market overlaps with the European market session, from 12:00 to 16:00 pm (GMT). 

Generally, global macro-economic factors such as unemployment, inflation, and fiscal policies affect the forex market. Here are some key factors that influence the price of the USD/JPY pair:

• Changes in global supply and demand can strengthen or weaken the respective currencies.


• Central banks control interest rates to fight inflation or deflation. For instance, if the Bank of Japan lowers the interest rate of the Japanese yen, the demand increases.


• A pickup or slowdown in inflation rates has an impact on how currencies are valued by investors. Currencies with low inflation rates tend to appreciate. Inversely, high inflation can devalue a currency.