USD/JPY overview
USD/JPY — “the Gopher” — is the second most-traded currency pair globally and the largest by Asian-session liquidity. It is uniquely sensitive to US-Japan rate differentials and is the FX market’s go-to instrument for trading risk-on/risk-off flows alongside US Treasury yields.
What moves USD/JPY
- US 10Y Treasury yield — by far the dominant driver, +0.85 correlation
- Bank of Japan policy — rate decisions, yield-curve-control changes, intervention warnings
- Risk sentiment — JPY strengthens in equity drawdowns (“safe-haven flows”)
- MoF intervention — Japanese Ministry of Finance has historically intervened around 145–155 levels
Typical spread
USD/JPY trades at 0.2–0.6 pips raw on ECN brokers, 1.0–1.8 pips on standard accounts. Slightly tighter than GBP/USD, slightly wider than EUR/USD.