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USD JPY: Live Dollar-Yen Exchange Rate, Chart and Forecast

December 06, 2021 12:32 PM

The US Dollar – Japanese Yen pair (USD JPY) is one of the most liquid and arguably easiest currency pairs to trade in the forex trading realm. With that in mind, today’s guide will cover the different characteristics of USDJPY and give you several tips that’ll allow you to trade it successfully.

What is USD JPY? Overview

The US dollar is the de facto financial leader and the currency of the largest economy in the world. The Yen, on the other hand, is the currency of Japan which happens to be the third-largest economy in the world. As such, the USDJPY pair is one of the most widely speculated upon and traded currency pairs globally, for reasons we’ll explain below.

The USDJPY currency pair indicates how many Japanese Yens you’ll need to purchase a single U.S. dollar on the global forex market. And as evident from the USD JPY price chart, this exchange rate will usually fluctuate consistently throughout the day, weeks, and months, owing to a multitude of political and economic factors.

USDJPY Chart

To effectively study how the price of USDJPY moves, you will need some sort of way to look at its current as well as historical price behaviour. That’s where this USDJPY price chart comes into play. 

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How to Read the USDJPY Chart

Before delving deeper into how to read a forex chart, you need to know about the main difference between forex and stock price charts.  

Unlike stock charts, Forex charts usually show two currencies: 

  1. The quote or variable currency (which appears last on the chart)  
  2. The base currency (which appears first).  

The first currency’s price is always reflected in units of the second currency. As the USDJPY chart also shows, the x-axis (horizontal axis) represents the time scale, while the y-axis (vertical axis) represents the price scale. Prices have been plotted from left to right across the x-axis, and you’ll find the most recent price is plotted furthest to the right.

USDJPY types of chart

Another thing you’ll need to understand so you can read a forex chart effectively is the different types of charts. Forex charts come in a wide array of forms, but the three most popular types are line charts, candlestick charts, and bar charts.  

  • The line chart is the simplest of them. It involves marking the different closing prices. When these points get strung together with a line, they show you the fall and rise of a currency pair over time.  
  • Bar charts are a little more complex but also more detailed. They show the closing and opening prices of USDJPY, as well as the lows and highs. The top of a vertical bar shows the highest traded price for that period, while the bottom shows the lowest. On the right side of a USDJPY bar chart is a horizontal hash showing the closing price. The hash on the left side shows the opening price. 
  • The last kind is the candlestick chart, which indicates the high and low USDJPY trading ranges using a vertical line. For those who are data-hungry, candlestick charts also use blocks in the middle, which indicate the range between closing and opening prices. If the middle block is colored or filled, it indicates that USDJPY closed at a lower price than it opened. On the other hand, a different colored or unfilled middle block indicates that the opening price was lower than the closing price.   

USDJPY Historical Data 

To make accurate USDJPY forecasts and predictions, it also helps to understand some key events in the currency pair’s relationship. That’s where this section of the guide comes into play.  

USDJPY Exchange Rate History 

The Menji Government created the Japanese Yen in 1871 to replace the Spanish Silver Dollars, which were mainly in use throughout the nation. Meanwhile, the US Dollar was created in 1792 through an act of Congress, replacing a mix of currencies in circulation throughout different North American colonies.  

The USD and JPY were at par on a one-for-one basis for just two years, before the 1873 great devaluation of silver brought the Yen’s value tumbling to 0.5 against the US Dollar. Then, the Japanese Yen was fixed to Gold’s value following this period, which froze JPY’s value to $0.50 for decades. This changed in 1913, when the Yen left the Gold Standard, along with a whole lot of other major currencies in the world at the time.  

After the Second World War, the United States Government fixed the Yen’s value at 360. This rate stuck until 1971, when the Bretton Woods system fell apart and the US abandoned the Gold Standard. After that, the JPY was floated, implying that its value wasn’t pegged to the dollar anymore. 

USD JPY Today 

Since then, USDJPY has experienced significant ups and downs. For instance, the 1980s Japanese boom saw the undervalued Japanese Yen soar in value against the US dollar before sharply declining when the asset bubble finally burst.  

More recently, in 2021, the Yen depreciated past the 114 yen mark per US dollar, as the US dollar accelerated to a three-decade high of 6.2%, raising expectations of earlier interest hikes by the Federal Reserve. Government data showed that wholesale inflation in Japan hit its four-decade high in 2021, due to supply bottlenecks and rising commodity prices.  

What Influences USDJPY Exchange Rate? 

Accurately investing in the USDJPY currency pair requires you to have a detailed understanding of the different factors that cause its movements. Some of the most significant are as follows. 

  • Government intervention: The Bank of Japan (BOJ) and the Federal Reserve of the United States (FED) are responsible for monetary policies in the two nations. As such, traders should expect major swings when either government makes drastic monetary policies. 
  • The pace of economic growth: Overall, the Japanese economy grows at a slightly slower rate than that of the US. In fact, the Japanese yen has been growing very slowly over the last couple of years, and if nothing changes, that will mean a consistent downward trend against the US dollar.  
  • Japanese national disasters that hit Japan can have substantial effects on the USDJPY.  
  • Japanese experts vs. imports: When the Japanese nation exports less than they import, it implies that they are selling less than they are purchasing. This, in turn, means the USD will strengthen against the Yen.  
  • Economic Strength: The most significant influence on the USDJPY relationship will be their respective economic strengths. When the Japanese economy suffers, the US dollar is likely to strengthen, and vice versa. Thus, industrial production, wage growth, and unemployment rates are just a few of the key economic indicators that all USDJPY traders should follow.  

Note that spotting excellent trading opportunities in the USDJPY price movements requires to have a great understanding of how the above underlying forces work to tip the balance in a specific currency.  

USD JPY Forecasts and Predictions 

Below are USD JPY forecasts for the upcoming years, as set by US and Japanese agencies. 

USD to JPY rate Predictions  2022 (Dec)  2023 (Dec)  2024 (Dec)  2025 (Dec) 
The Economy Forecast Agency  123.11  119.26  114.63  116.03 
Panda Forecast  114.12  113.92  118.90  123.9 

Why Trade USDJPY Today? 

There are whole lots of reasons why USDJPY real-time trading is an enticing prospect. The most appealing characteristics include: 

  • Availability of resources: In many ways, conducting USDJPY technical analysis from a streaming chart is quite easy. Also, depending on the broker you choose, such as ZFX for example, you will receive up-to-date news, hourly forecasts, and market reviews. 
  • Beginner-friendly: Relatively fantastic liquidity and smooth trends make the USDJPY currency pair appealing for both experienced and beginner traders. 
  • Diverse trading vehicles: Since USDJPY is a popular pair, there are several trading vehicles one can use to generate profits, including E-micro & E-mini USDJPY futures, ETFs, options and more.  
  • Predictability: Since the JPY USD exchange rate is usually linked to commodities trading in Japan, analysis and research should be relatively straightforward. 
  • USD/JPY’s volume is huge, as the pair is based on two of the world’s most active currencies.  
  • Volatility: Often driven by Asian market forces, this currency pair often displays high levels of volatility. This presents plenty of opportunities day traders can grab and turn a profit.  
  • Relatively low spreads: The USDJPY remains extremely popular, partly thanks to its comparatively low ask-bid spreads. 

Where Can I Invest in the USD JPY Pair? 

When trading a main currency pair like USDJPY, it’s incredibly essential that you pick a trusted brokerage platform to do so through, like ZFX. As a quality broker, ZFX works with reliable resources and expert data to help you execute informed trades. The platform also offers all its traders direct market access to allow them to sell and buy at precisely the moments that they want to.  

To top it off, ZFX holds a license from trusted financial regulatory bodies in all the nations it operates in, which guarantees the safety of your funds.

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How to Trade USD JPY Now 

If you’d like to learn how to register an account with ZFX, follow the next few steps. 

Step 1: Open a ZFX Account 

First, you’ll need to head to ZFX’s homepage and select”Open an Account’. If you would like to try out your trading strategy with virtual money first, hit the “Try demo” instead.  

Trade Walmart - Step 1

After selecting “Open an Account”, the electric form above will appear. Fill in all the boxes, and hit the “Next” button when you’re done.  

USD JPY: Live Dollar-Yen Exchange Rate, Chart and Forecast

That should then bring you to a second form. Here, you’ll need to select your preferred account type. Then, agree with ZFX’s privacy policy and terms of use. When you’re done, hit the “Sign up now” button.  

Step 2: Make Your First Deposit 

To put your USDJPY forecasts to work, you’ll need to fund your account. You can deposit money using a bank card or transfer. Choose how much you want to invest, then click on “Deposit”. 

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Step 3: Verify Your Account

Before you can withdraw any amount from your ZFX account, you’ll need to verify your identity and address. For identification, deliver a government-issued ID and utility bill (or bank statement.) ZFX will then verify your identity.

trade Facebook shares with ZFX - Step 4

Step 4: Start Trading USD JPY  

You’re now a step away from becoming a JPY USD trader. The only thing left to do is download the MT4 platform, which you’ll be using to execute all your trades. You can do so via the link on the ZFX website and then install it on your device. Once installed, log in using the details ZFX sent to your email, find the current USDJPY rate, and invest whenever you’re ready. 

Tips for USD JPY Beginner Traders

New to trading the US dollar to Japanese yen pair? If so, you may want to keep the following things in mind in order to start trading in the best conditions.

  • Know the best time to trade USDJPY (if you’re a day trader) 

Note that no matter how great your strategies are, incorrect timing will almost always bring you undesirable results. Thus, know that according to USDJPY historical data, the best time to trade the pair is between 12 Noon and 3 PM GMT. Indeed, this is when New York is trading. 

  • Have a USD/JPY strategy 

Needless to say, you will not succeed in the forex realm if you do not have a strategy. With that in mind, create a plan and have a strategy before investing your real cash in the market. Speaking of real money… 

  • Understand the importance of the Demo account

If you haven’t confirmed beyond a reasonable doubt that your USDJPY trading strategies can make you money in the long term, stick to the demo account until you do. 

  • Never forget the fundamentals 

In order to keep trading the dollar to yen pair effectively, you’ll need to constantly consider the drivers behind it. Some of the most significant you should always have in mind include, for instance:

  1. Central bank interventions
  2. The economic strength of Japan
  3. The US and world economic growth

Bottom Line: Is USD JPY a Good Investment Now? 

USDJPY is strongly linked to the Japanese commodities market. Because of this, the price swings created by the pair’s liquidity are easier to predict compared most other currency pairs. USDJPY also features a low bid-ask spread compared to most other major currency pairs, which increases your profits potential.  

Do you want to invest in this promising forex pair today? If so, can do so through ZFX in a few simple steps. Indeed, this broker will offer you the high quality MT4 platform and strong regulation. You can invest in a wide range of forex pairs and other assets to diversify your portfolio.

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