USD/JPY

USD/JPY prices the gap between US and Japanese interest rates. The US dollar is the base currency and the yen the quote currency, so a rise in the pair means a stronger dollar or a weaker yen. When US rates rise relative to Japanese rates, holding dollars funded with yen pays more, and the pair tends to climb; when that gap narrows, or when investors close yen-funded positions in a hurry, it tends to fall.

The yen leg gives the pair a behaviour the dollar-quoted majors lack. Positions that borrow yen to hold higher-yielding assets, known as carry trades, build up while the rate gap is wide and the market is calm. Closing them means buying yen, so a shock that forces many holders out at once moves USD/JPY down far faster than the slow climb that built the positions. The falls of 2007–08 and July–August 2024 on this page both follow that pattern.

Japan's Ministry of Finance is the other participant with a visible record on this pair. It publishes every foreign exchange intervention it carries out, as a total for each monthly period and, each quarter, with the date and amount of each day. From 22 September 2022 to 6 May 2026 it sold US dollars and bought yen on ten published days, after more than 24 years with no yen-buying operation, and its monthly release for 30 July to 26 August 2026 reports a further ¥15,399.3 billion of intervention.

Five scheduled events and one unscheduled one are the main recurring drivers of USD/JPY. Each works through the interest-rate gap, the dollar's broad direction or the yen's funding role. The size of the move depends on the surprise against expectations, so the cards below give no typical pip range; the measured spread of ordinary daily moves is in the volatility section.

The rate gap is the slow-moving driver. With the upper limit of the US federal funds target range at 4.00% and the Bank of Japan's target for the uncollateralised overnight call rate at around 1.25% (Federal Reserve and Bank of Japan policy statements), the top of the Fed's range sits 2.75 percentage points above the Bank of Japan's target. Each decision on either side changes that gap, and the swap a broker credits or debits overnight changes with it.

US releases move the pair through the same channel. CPI and Non-Farm Payrolls are both published at 8:30 a.m. New York time (13:30 UTC on US standard time, 12:30 UTC while US daylight saving time applies), and FOMC statements at 2:00 p.m. New York time. A surprise that shifts expectations for the Fed's path moves US yields first and USD/JPY with them.

Intervention is the event that does not appear on any calendar. The Ministry of Finance confirms an operation only after the fact. Its published operations since 2022 are below, with each amount in the Ministry's own units.

USD/JPY moved more than EUR/USD across 2025, in pips and in percentage terms. Measured on the ECB's daily reference fixings, the median day-to-day change in USD/JPY was 57.4 pips, or 0.385% of the price, against 28.0 pips and 0.250% for EUR/USD. Pip counts alone overstate the gap, because a USD/JPY pip is worth less: at 158.02 the median USD/JPY day comes to $363.25 per standard lot, against $280.00 for EUR/USD at $10 per pip.

The gap holds from the median to the 95th percentile. In pips, USD/JPY's day-to-day change ran 1.6 to 2.1 times EUR/USD's across those rows; in percentage terms the median was about 1.5 times. The largest days were close, at 309.8 and 294.0 pips. Those figures count moves in either direction, and a stop-loss sits on one side of a position. In 2025 the fixing fell by more than the 57-pip median on 61 days and rose by more on 66, about five times a month each way, and intraday ranges cross a stop of that size more often; it fell by more than 137.5 pips, the 90th percentile, on 14 days and rose by more on 11, about once a month each way.

Volatility on a chart is usually read through the average true range, which extends the intraday high–low to take in any gap from the previous close. For a stop or a position size, read the 14-period ATR on your own chart: the fixing figures above show the relative scale of the two pairs, not the distance a stop needs.

Tokyo is the pair's home market, but most of its scheduled US event risk lands later in the day. The US 8:30 a.m. releases fall inside the London–New York overlap, which under the common session convention runs 13:00–17:00 UTC on standard time, and FOMC statements follow in the New York afternoon, after the London close. Spreads are set by each broker and widen when depth thins, most visibly around the daily New York close and the Asian open.

Three documented episodes show how far USD/JPY can travel against a small account. The worked examples use a $5,000 account at 1:100 leverage and 1 standard lot. Each loss arises in yen and converts to dollars at the price where it is realised: the episode's closing price for the account impact, the stop price for the 1% trade. Prices are ECB reference fixings, with USD/JPY derived as EUR/JPY ÷ EUR/USD.

The three episodes share a mechanism. Carry positions build slowly while the rate gap is wide and markets are calm, and close quickly when the gap narrows or a shock forces sellers out. A long position's swap credit does not cushion that kind of move: at the illustrative 0.5% markup in the swap example below, a full year of overnight credit on 1 lot comes to about $2,300, which a fall of about 356 pips from 158.02 erases, with the loss converted at the 154.46 where it is realised. The 2024 unwind was 1,967 pips.

USD/JPY moves against the dollar-quoted majors most of the time, because the dollar sits on the opposite side of the quote. The dollar is the base currency in USD/JPY and the quote currency in EUR/USD and GBP/USD, so a broad dollar rally lifts USD/JPY and lowers the other two. Across 2025, daily changes in the ECB fixings gave a correlation of −0.62 with EUR/USD and −0.53 with GBP/USD.

A negative coefficient is not a hedge on its own. Holding long USD/JPY and long EUR/USD together offsets part of the dollar exposure, since one position is long dollars and the other short. With the two positions sized so each swings the same dollar amount, a correlation of −0.62 still leaves √(2 − 2 × 0.62) = 0.87 of one position's swing open, because the part of each pair's movement that the other does not mirror stays exposed. The two positions also pay two spreads and carry two swaps, whose signs depend on each pair's rate gap and the broker's markup.

EUR/JPY is the closer relative on the yen side, at +0.64. When the move is about the yen rather than the dollar, the dollar-side offset does little: between the 3 July and 5 August 2024 fixings USD/JPY fell 12.1% and EUR/JPY 10.4%, while EUR/USD rose 1.9%, so a long EUR/USD position recovered only a small part of a long USD/JPY position's loss.

USD/JPY at 158.02 on a USD account, 1 standard lot (100,000 USD notional). Because the lot is denominated in dollars, the margin on a USD account does not depend on the price:

The pip value works the other way round. Each pip on 1 lot is always ¥1,000, and its dollar value is ¥1,000 divided by the price: $6.33 at 158.02, $6.18 at 161.91 and $7.03 at 142.24. A dollar-based stop on USD/JPY therefore buys a slightly different number of pips at each price, and the position size from a pip calculator needs the current rate, not a fixed $10. Leverage changes none of this: it sets the margin held and, with it, how far the price can move before the broker's stop-out closes the position.

Spread cost per round trip. With an assumed 1.0-pip spread on a standard account (spreads are set by each broker and vary by account type and time of day), a round trip on 1 lot costs ¥1,000, or $6.33 at 158.02. A raw-spread account at an assumed 0.3 pips plus an assumed $7.00 round-turn commission costs $1.90 + $7.00 = $8.90 per round trip: on these assumptions the raw account costs more, because the 0.7 pips it saves are worth $4.43, less than the commission. Raw pricing comes out cheaper only when the commission is smaller than the spread it removes.

Swap on each side. With the upper limit of the US federal funds target range at 4.00% and the Bank of Japan's call-rate target at around 1.25%, a long USD/JPY position earns dollar interest and pays yen interest. Dollar interest accrues on a 360-day year and yen interest on a 365-day year, so with no broker markup 1 lot long earns $11.11 and pays $3.42 a night, a net credit of about $7.69. Brokers deduct a markup from the side that earns and add it to the side that pays. At an illustrative total markup of 0.5–1.5% a year, an assumption rather than a published broker figure, the long side earns about $3.55 to $6.31 a night and the short side pays about $9.07 to $11.82. Wednesday's rollover, typically 17:00 New York time and set by the broker, charges three nights at once unless a bank holiday moves the settlement dates: about $10.64 to $18.92 credited to a long, and $27.20 to $35.47 debited from a short. Every figure moves when either central bank changes its rate, and the broker's swap table gives the figure that applies on a given night.