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Japanese Yen Futures 

japanese-yenThe Meiji government made the Yen the official Japanese currency in 1871 after years of an overly complex currency system in the Edo period. Yen literally means round object in Japanese. Ever since the Bretton Woods system collapsed and the monetary system switched to floating exchange rates, the value of the Japanese Yen has similarly floated ever since. However, because of its floating exchange rate, the Japanese Yen is considered extremely volatile. The Yen is the third-most-traded currency in the world, most likely due to the fact it is so undervalued compared to the US Dollar and British Pound.

Japanese Yen Contract Specifications

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Japanese Yen Facts

Japanese Yen futures allow traders to assess value against the U.S. dollar, as well as the opportunity to address risk from currency fluctuations in other foreign trade markets.

Currency rates are determined by a one base currency quoted in relation to a different currency. Major currencies that are traded are floating. Central bank monetary policies can affect the value of currency. The Bank of Japan regulates monetary policy for its currency. For instance, low interest rates dictated as policy can be bearish for currency value because new money is being pumped into the market. This is unappealing to foreign investors because returns yield those low interest rates. In contrast, high interest rates set as policy are bullish and appealing to foreign investors because of high interest yields from the returns. Currency values can be also be affected by the nation’s current account balance. An excess or influx in the balance is considered to be bullish, while a deficit or drainage is considered to be bearish. Economic stability and investment in the country also help strengthen currency values because international investors are likely to buy into that country’s favorable markets.

Source: Barchart

Last updated September 2015.

Additional Info

Recent Posts on the Japanese Yen

  • Understanding Japanese Yen Futures (1/25/2022) - Understanding Japanese Yen Futures One of the world’s eight major currencies, the Japanese yen (JPY) is viewed as a mainstay of global finance. The Bank of International Settlements Triennial Survey (2019)[1] has the yen involved in US$1.1 billion in average daily turnover on the over-the-counter (OTC) currency markets. 

  • Beyond the Spotlight: January 3, 2022 (Yen, Sugar, Cattle) (1/3/2022) - Beyond the Spotlight is a weekly video released on Mondays that spotlights two or three markets that may become trading opportunities for the week ahead. This enables you as a subscriber of the Trade Spotlight advisory service to look ahead with us, while potentially creating additional trading opportunities for yourself.