Definition – What does U.S. Dollar Japanese Yen (USD JPY) mean?
The U.S. dollar Japanese yen (USD JPY) is a currency pairing whereby the U.S. dollar and the Japanese yen can be traded against each other. The USD JPY can be thought of as the dollar versus the yen – you short the dollar and go long the yen or short the yen and go long the dollar. The USD JPY is among the most traded currency pairs. The USD JPY may also be written as USD/JPY.
ForexTerms explains U.S. Dollar Japanese Yen (USD JPY)
The USD JPY represented the world’s two largest economies until China surpassed Japan in GDP. Although Japan is no longer number two, the USD JPY is still a very popular trade. Japan is an export driven nation with huge debts that are mostly held domestically. The U.S. is largely service and finance driven with its debt held all over the world. Since the two face very different pressures, they can can be used to set up interesting trades in response to changes in global economic activity.