Live and Historical USD/JPY Rates

This chart represents the value of the United States dollar (USD) against the value of the Japanese yen (JPY) - in other words, how many yen are needed to purchase one dollar. Both JPY and USD are major currencies. USD/JPY forms a major pair, but it does not form a commodity pair.

The U.S Dollar

Though many currencies share the name dollar, the US dollar is the strongest currency in the world. Important commodities like oil and gold are traded exclusively in the dollar. Some businesses trade their stocks exclusively in the dollar as well. Its value is controlled very closely by the Federal Reserve's adjustment of dollar lending interest rates. At one time, the Chinese yuan was pegged to the dollar, and for a time the US was willing to endure the stress of that conflicted relationship to maintain that situation. The dollar is the premier reserve currency, holding almost two times the value of its closest competitor, the euro.

The Japanese Yen

The Japanese yen follows the dollar in most traded currency and reserve currency. When the Japanese yen is used in currency combinations, the pip is in the second place (.01) as opposed to the usual fourth place (.0001). The Japanese yen has had a floating interest rate since 1973.Like the USD's Federal Reserve; the Bank of Japan maintains tight command over the Japanese yen. In the decades following 1990, The Bank of Japan used its power to keep interest rates low on the yen. This boosted the yen's popularity as a carry currency and accomplished the purpose of growing investment in Japanese assets.

USDJPY Analysis

The UDS/JPY is one of the largest currency pairs in the forex market. One of the most popular moves for the two decades after 1990 was a carry trade from JPY into USD. This move became unprofitable when USD interest rates also dropped to the bottom. The best profit opportunities now arise from events in manufacturing or from Japan's trade relationship with China. It is also possible that the two lost decades in Japan may have been an early form of what the US now faces. If so, carry trades could be profitable, but in