Overview:

The US Dollar and Japanese Yen is the second most traded currency pair, with only the EURUSD trading more volume. USD to JPY is the gauge on how the Asian economy is performing and is noted for how tight the spreads are therefore always attractive for investors in the short-term and long-term timeframes. As Japan is a large exporter of goods and services, the Bank of Japan (BoJ) does intervene in to keep the value of the Yen low.

Key Facts:

USD

• The Central Bank of the United States is the Federal Reserve (sometimes referred to as the Fed).
• USD is the main global reserve currency and the United States of America (U.S.A) is the largest economy in the world.
• The (US Dollar) USD is used to price most global commodities (including Oil and Gold).
• The US has a well developed economy with high productivity levels and is fuelled by huge natural resources.
• The International Monetary Fund (IMF) states that the US Gross Domestic Product (GDP) is $15 trillion and makes-up c. 23% of global GDP to exchange rates.

JPY

• The Bank of Japan is the Central Bank.
• Japan is a world-leader in technology manufacturing, especially the production of motor vehicles, electronic equipment to name just a few and are a member of the G7.
• The Bank of Japan keeps interest rates at virtually zero, therefore making the JPY 'carry-trade' attractive to other high-yielding currencies
• Japanese economy is a free-market & highly developed and third largest in the world by nominal GDP and fourth largest by the Purchasing Power Parity (PPP) due to the innovative nature of their economy.
• Faces increased competition from China and South Korea and carries the highest ratio of national debt to GDP of any developed nation due to low growth rate and aging population and social welfare costs. Japan also faces a declining population issue as cost of living is high.