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Japanese Yen (JPY) - BER Currency Guide

In this currency guide we look at :

  1. JPY General Info
  2. JPY Market View
  3. JPY News & Updates
  4. JPY Cross Rates

Japanese Yen General Info

The three letter currency code for the Japanese Yen is JPY and the symbol is ¥. It is the domestic currency in Japan.

According to the Bank for International Settlements, in 2016, trading in the Japanese yen (ISO: JPY) contributed to 22% of total foreign exchange market turnover, making the yen the world’s third most traded currency.

Like government bonds and gold, the Japanese yen is considered a safe haven asset – it is the premier safe haven of the currency world. This means that the yen is likely to increase in value against other currencies during periods of economic uncertainty or when global geopolitical risk is elevated, or during bouts of high market volatility.

Since 1995, against the US dollar, the yen’s lowest valuation came in August 1998 when USD/JPY reached 147.67 (¥100 cost a little less than $0.68). Its post-1995 high came in October 2011 when USD/JPY traded at just 75.56 (¥100 cost $1.32).

The Japanese yen is a crucial part of the ‘carry trade’ – a popular strategy among foreign exchange traders in which they borrow in a currency with a low interest rate and use those funds to invest in currencies paying a higher rate. In recent decades, the most popular way to fund the carry trade has been to borrow (sell) yen due to Japan’s consistently low interest rates (since 1996 Japanese rates have averaged less than 0.5%).

JPY - Market View

In mid-June, Bank of America Merrill Lynch (BAML) said that their preferred yen position was short JPY/NZD, which is to say that BAML were predicting that the yen would fall in value against the New Zealand dollar, although the bank declined from giving a precise target for JPY/NZD. At the time of the bank’s prediction, JPY/NZD stood at 0.0125, up 1% on the year.

Interestingly, by mid-June, the yen had gained more than 5% on the year against the US dollar and USD/JPY had pushed above 111 despite an obvious divergence in the paths of monetary policy between the US Federal Reserve and the Bank of Japan (BoJ).

In June, the Fed had continued with its tightening cycle by raising US interest rates by 25 basis points while the BoJ maintained extreme monetary policy stimulus in the form of negative short-term interest rates and a target of 0% for 10-year government bond yields, together with quantitative easing (bond buying).

Yen strength in spite of these policy differences is indicative of the sheer level of disappointment felt by investors at the inability of President Trump to implement highly inflationary policies which he promised on the campaign trail.

The BoJ are expected to maintain especially loose monetary conditions for the foreseeable future in an attempt to boost Japanese economic growth and inflation. Inflation in the country remains at just 0.4%, well below the BoJ’s target of 2%, and inflation excluding the volatile fresh food and energy components is non-existent (0.0%).

Japanese Yen - News & Market Updates

Loonie Climbs as Greenback Slides

USDCAD broke below 1.3100 in early New York trading, reaching a low of 1.3085. (so far)  Overnight, USDCAD bounced from 1.3150 to 1.3195 following the weekly API crude report.  A tiny increase in inventories (0.85 m/b) led to the out-sized rally, which was more a factor of thin markets than anything else. Bank of Canada... View article >
Posted on 28 June 2017 | 1:19 pm GMT
Author: Agility Forex

NZD Reverses From 4 ½ Month High, EUR Still Climbing and AUD Rallies on Talk of Rate Hikes

NZD/USD climbed yesterday to highs not seen since early February but gave back all gains prior to the end of the New York session, and to the surprise of many finished down on the day. In the absence of any New Zealand-specific data or news, the rapid rise and sudden decline in the kiwi can... View article >
Posted on 28 June 2017 | 8:05 am GMT
Author: Joel Wright

Yen Falls to 1-Month Low Ahead of Yellen Speech

“Hedge funds are selling yen this week, and positive comments from Yellen could give them an excuse to sell even more,” said Kaneo Ogino of FX research group Global-Info Co yesterday. Ogino’s comments came at the end of yesterday’s New York session which ended with the yen trading at ¥111.84 against the dollar, marking a... View article >
Posted on 27 June 2017 | 5:22 am GMT
Author: Joel Wright

Bubble, Bubble Oil and Trouble

Oil spills are messy and this latest bout of WTI price declines is no different. The 5.3 percent fall in WTI prices between Monday and Tuesday, talk of a “bear” market and rampant scepticism that Opec production cuts can offset rising production elsewhere are behind the move. Tuesday’s, end of day, API Weekly Crude stocks... View article >
Posted on 21 June 2017 | 11:38 am GMT
Author: Agility Forex

“Too Early to Raise UK Rates” says Mark Carney

Bank of England Governor Mark Carney said, in reference to the outlook and timing of  UK rate hikes, “ From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment”... View article >
Posted on 20 June 2017 | 12:01 pm GMT
Author: Agility Forex

Yen Threatens Major Level Against THB, Falls to Multi-Month Lows vs. NZD and AUD Following Surprise Japanese Trade Deficit

The market received surprising trade data from Japan on Monday. What had been expected as a ¥43 billion trade surplus for the month of May was actually a deficit of ¥203 billion. April’s surplus had been ¥480 billion. The data came as a surprise to many given that the Japanese economy had seemingly been picking... View article >
Posted on 20 June 2017 | 7:18 am GMT
Author: Joel Wright

Australian Dollar Falls but Recovers Following Moody’s Downgrade of Australia’s Top Banks

On Monday, US ratings agency Moody’s cut its credit ratings on Australia’s four largest banks by one notch to Aa2 from Aa1. The banks – Westpac, ANZ, Commonwealth Bank and National Australia Bank – retain their “investment grade” status but are no longer top-rated by the agency. Less well known, smaller banks that were downgraded... View article >
Posted on 19 June 2017 | 1:10 pm GMT
Author: Joel Wright

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