USD/JPY: US dollar / Japanese yen

USD/JPY is the price of one US dollar in Japanese yen. If the pair is quoted at 150.00, one dollar buys 150 yen; a rising price means the dollar is strengthening against the yen, and a falling price means the yen is gaining. It is the second most traded currency pair in the world and the main way traders express a view on the yen.

Unlike EUR/USD, the dollar is the base currency here, so the direction can trip up beginners: buying USD/JPY is a bet on the dollar rising against the yen, not on the yen. This profile explains what moves the pair, how it behaves through the day, what it costs to trade and what makes it different from the other majors.

What USD/JPY is and who trades it

According to the BIS Triennial Central Bank Survey of April 2025, USD/JPY accounted for about 14% of global FX turnover, roughly 1.4 trillion dollars a day, second only to EUR/USD. The yen is the third most traded currency overall, behind the dollar and the euro.

The participants include:

• Japanese exporters and importers, who convert dollar revenues back into yen or buy dollars to pay for energy and raw materials.
• Japanese investors, including life insurers, pension funds and households, who hold large amounts of foreign bonds and shares and decide how much of that currency exposure to hedge.
• Global macro funds and banks, for whom the yen is a key funding currency and a common way to trade views on US yields.
• Japan's Ministry of Finance, which has intervened in the market on several occasions (more on that below).
• Retail traders, including Japan's large community of individual FX traders, often nicknamed "Mrs Watanabe" by the press.

How the forex market works gives the wider context.

The two economies and central banks behind it

Japan and the Bank of Japan

The Bank of Japan sets policy for one of the world's largest economies. For much of the period since the late 1990s Japan fought low growth and falling prices, and the BoJ responded with near-zero and then negative interest rates, massive bond buying, and from 2016 a policy of controlling ten-year government bond yields. In March 2024 it ended negative interest rates, its first rate increase in 17 years, and has since moved policy gradually.

The BoJ's Policy Board holds eight monetary policy meetings a year. There is no fixed release time: the decision usually comes around midday Tokyo time, which is the early hours of the morning in the UK, followed by the governor's press conference in the Tokyo afternoon.

Japan's exchange-rate policy is the responsibility of the Ministry of Finance, not the central bank. The BoJ carries out intervention as the ministry's agent. This split is important: comments from senior finance ministry officials can move USD/JPY as much as a BoJ meeting.

The United States and the Federal Reserve

On the other side, the Federal Reserve sets US rates at eight FOMC meetings a year, with decisions released at 14:00 New York time (19:00 UK time for most of the year). Because Japanese rates have been close to zero for so long, swings in US rates and in US Treasury yields have usually done most of the work in moving the differential. See central banks and interest rates.

What typically moves USD/JPY

The yield gap. Over long stretches, USD/JPY has tracked the gap between US and Japanese bond yields closely. When US yields rise relative to Japanese yields, holding dollars rather than yen pays more, and the pair has tended to rise. The glossary entry on the interest rate differential explains the idea.

The carry trade. With yen rates so low, investors have often borrowed in yen to buy higher-yielding assets elsewhere. This carry trade keeps steady selling pressure on the yen while markets are calm. When markets turn, those positions are closed, the borrowed yen must be bought back, and the yen can rise very quickly. That is why the yen has a reputation as a safe haven even though Japan's own rates are low.

Intervention. When the yen falls fast, Japanese officials first issue verbal warnings, and if those fail they may sell dollars and buy yen. Intervention can move the pair several big figures in minutes. See the glossary entry on intervention.

US data. Payrolls, CPI and other top-tier US releases move US yields, and through them USD/JPY. See how economic data moves forex.

Japanese data such as Tokyo CPI (released ahead of the national figure), wage negotiations in the spring and GDP matter mainly for what they imply about the next BoJ move.

Character and behaviour by session

All times are UK time; Japan does not use daylight saving, so the gap between Tokyo and London is nine hours in the UK winter and eight in the UK summer. The market hours tool shows these in your own time zone.

• Tokyo session (about 00:00–09:00 in winter, 01:00–10:00 in summer): unlike EUR/USD, USD/JPY has a genuinely active Asian session. The Tokyo morning, especially around the 09:55 Tokyo time fixing used by Japanese banks to set customer rates, sees heavy corporate flow.
• London (from about 08:00): activity rises as European dealers arrive.
• London/New York overlap (about 13:00–17:00): usually the busiest window, with US data typically at 13:30 UK time (12:30 for the few weeks each spring and autumn when US and UK clocks are out of step).
• Late New York and the rollover (around 22:00): quieter, with spreads often widening briefly.

In volatility terms, USD/JPY has spent long periods trading in fairly orderly trends, interrupted by abrupt reversals when risk sentiment snaps or officials step in. Those reversals can be faster than the preceding trend. Read gap risk and weekend risk before holding through a weekend or a BoJ meeting.

Costs of trading USD/JPY

USD/JPY is one of the cheapest pairs to trade on spread, typically close to EUR/USD at most brokers during busy hours. Spreads widen around the daily rollover, at the Monday open, and around BoJ decisions and intervention.

The swap is where USD/JPY differs most. Because US rates have been well above Japanese rates for long periods, long USD/JPY positions have often earned a positive swap and short positions have paid a charge, after the broker's mark-up. That is the carry trade in miniature. Two cautions:

• A positive swap is usually small relative to the daily price moves; a modest adverse move can erase weeks of swap credit.
• Swap rates change when interest rates change, and brokers' mark-ups vary. Check the platform's long and short swap figures, and remember the triple charge on Wednesday nights. See swap and overnight financing.

For a full comparison of spread, commission and swap, see how to compare trading costs.

Pip value: a worked example

A pip on USD/JPY is 0.01, the second decimal place (the third decimal is the pipette). Because the yen is the quote currency, pip values are fixed in yen:

• 1 standard lot (100,000 dollars): 1,000 yen per pip
• 1 mini lot (10,000 dollars): 100 yen per pip
• 1 micro lot (1,000 dollars): 10 yen per pip

To convert to dollars, divide by the exchange rate. Example (illustrative numbers): at a rate of 150.00, 1,000 yen is about 6.67 dollars, so a standard lot is worth about 6.67 dollars per pip. At 125.00 it would be 8 dollars per pip. The pip value in your account currency changes as the rate changes, which matters for position sizing.

Suppose you sell 0.5 lots of USD/JPY at 150.00 with a stop-loss 40 pips away at 150.40. Each pip is worth 500 yen, so the potential loss is 40 times 500, or 20,000 yen, about 133 dollars at that rate, plus costs. The margin at 30:1 on a 50,000-dollar position is about 1,667 dollars. The pip value calculator and position sizing guide do this for any account currency. If the pip-size convention is new to you, see what is a pip.

Correlations with other pairs

• EUR/JPY and GBP/JPY share the yen side and often move with USD/JPY when the yen itself is driving. See the EUR/JPY and GBP/JPY profiles.
• AUD/JPY is widely watched as a gauge of risk appetite; it and USD/JPY often fall together in risk-off moves. See AUD/JPY.
• EUR/USD sometimes moves in the opposite direction when the dollar is the main driver, but the link is looser than with USD/CHF.
• US Treasury yields are not a currency pair, but for long periods they have been one of the closest outside correlates of USD/JPY.

These relationships come and go. A long USD/JPY and a long EUR/JPY position are both short yen, so a sudden yen rally hits both. Our guide to currency correlation explains how to measure the overlap.

Notable history

• Plaza Accord, 22 September 1985. The G5 finance ministers met at the Plaza Hotel in New York and agreed to push the dollar lower. Over the following years the yen strengthened dramatically against the dollar.
• October 1998. During the turmoil around the Russian default and the hedge fund LTCM, the unwinding of yen carry trades produced one of the sharpest yen rallies on record. Japan also bought yen in 1998, its last such operation for 24 years.
• March 2011. After the Tohoku earthquake and tsunami, the yen surged to record highs on expectations that Japanese firms would repatriate funds. On 18 March 2011 the G7 intervened jointly to weaken it.
• 2022. As US rates rose rapidly and Japanese rates stayed near zero, the yen fell sharply. Japan intervened to buy yen on 22 September 2022, its first such move since 1998, and again in October 2022, according to Ministry of Finance data.
• 2024. Japan bought yen again on 29 April and 1 May 2024 and in mid-July 2024, according to official figures. In early August 2024 a rapid unwind of carry trades contributed to a sharp yen rally and a steep fall in Japanese shares.
• 2026. The Ministry of Finance reported record yen-buying in late April and May 2026, and on 31 July 2026 Japan and the US Treasury intervened jointly to support the yen, as confirmed by both governments in early August.

The lesson for retail traders is not to predict the next intervention, but to understand that USD/JPY can move hundreds of pips in minutes when official action or a carry-trade unwind hits, and to size positions accordingly.

Trading USD/JPY as a beginner

• Get the direction right. Buying USD/JPY means buying dollars. If your view is "the yen will strengthen", you sell the pair.
• Remember the pip value is in yen. Don't assume 10 dollars per pip per lot; it is usually less, and it changes with the rate.
• Respect intervention risk. When officials are warning about the yen, stops can be jumped and spreads can widen. Smaller positions and wider margins of safety are the usual response. Read slippage explained.
• Don't trade for the swap alone. A positive carry looks like income but can be wiped out by a single day's move against you.
• Use leverage carefully. The 30:1 cap means a 3.3% adverse move would consume all margin on a fully leveraged position. Most retail CFD accounts lose money; see leverage and margin and margin call and stop-out.
• Check the BoJ calendar. BoJ decisions land in UK night-time hours, so a position left open overnight can wake up to a very different price.

Frequently asked questions

Why is the pip on USD/JPY 0.01 rather than 0.0001?

Because one yen is worth far less than one dollar, yen prices are quoted with two decimals rather than four. The convention makes a pip on USD/JPY roughly comparable in size to a pip on the other majors.

Why does the yen often rise when markets fall?

Partly because of the carry trade: investors borrow cheaply in yen to buy riskier assets, and when they cut those positions they have to buy yen back. Japan's large holdings of foreign assets also mean that repatriation in times of stress can add yen demand. The pattern is a tendency and has not held in every episode.

Who decides when Japan intervenes?

Japan's Ministry of Finance decides, and the Bank of Japan carries out the trades on its behalf. The ministry publishes intervention totals monthly and a detailed daily breakdown each quarter.

Is USD/JPY good for beginners?

It is liquid and usually cheap to trade, but its sharp reversals and intervention risk make it less forgiving than its calm spells suggest. Beginners who trade it should use small positions and always set a stop-loss.

When is USD/JPY most active from the UK?

The Tokyo morning, roughly midnight to 03:00 UK time, and the London and New York overlap from about 13:00 to 17:00 are usually the busiest periods. Major US data at 13:30 UK time often produce the largest moves.