USD/JPY Spread Betting Guide

USD/JPY Spread Betting Guide

USD/JPY Spread Betting Guide

arrow_forwardLive USD/JPY Chart
arrow_forwardLive USD/JPY Prices
arrow_forwardWhere to Spread Bet on USD/JPY
arrow_forwardHow to Spread Bet on USD/JPY


Live USD/JPY Chart and Prices



6 November 2017: USD/JPY Close to Breaking Out?

The Bank of Japan has reiterated it’s commitment to ultra-loose monetary policy.

USDJPY has pushed to ¥114.73. According to LCG:

It could just be a matter of time before USDJPY pushes above the ¥115 level.

Exporters seem to be hedging against a weaker yen and large call options are seen at ¥114.50/¥115.00 for today’s expiry.
We’re getting pretty close to the resistance of the long-term triangle discussed below.

I’m waiting for a break before trading it though.


27 October 2017: Low Japanese Inflation Could Help USD/JPY

Overnight, Japanese inflation came in unchanged at 0.7%. With the election out of the way, it’s reasonable to expect Shinzo Abe doing his best to push that higher.

If so, that means a weaker yen and a reason why USD/JPY could break higher.



23 October 2017: Big USD/JPY Spread Bet Getting Close

Shinzo Abe was dominant in the Japanese elections. It looks like his Liberal Democratic party (LDP) and their coalition partner are on course to retain the two-thirds “supermajority” in Japan’s lower house.

Also see the Guardian’s Shinzo Abe secures strong mandate in Japan’s general election.

This means potential changes to the Japanese pacifist constitution… Abe wants a harder line on North Korea and so that political posturing is something to consider.

Short-term, a strong result allows Abe to continue running his printing presses =

  • trending_downWeaker Yen
  • trending_upRising USD/JPY
  • trending_upHigher Japan 225 index
Both USD/JPY and Japan 225 index are higher with the latter gapping up 142 over the weekend.


Potential USD/JPY Break Out

In the immediate term we’re looking at testing the May and July highs at around ¥114.40.

We’re also looking at a break of the triangle below. At break higher could be a big trade.

This is one to keep an eye on.

Potential USD/JPY Break Out


18 October 2017: USD/JPY Consolidating Above ¥112.00

The dollar is in demand after hawkish Fed expectations despite the soft inflation data.

Not helping are the yen are the political risks ahead of Japan’s snap election on October 22… although Abe doesn’t have any realistic opposition. His opponent dropped out a while ago.

When I get time I’ll put up the long-term USD/JPY chart, there’s a great triangle that’s still in play, e.g. see the 19 September comment below.



11 October 2017: Japan 225 at 21 Year High

The Japanese stock market is at a 21 year high but the correlation btween the stock market and the USD/JPY pair is more interesting.

See Japan 225 vs USD/JPY correlation.


2 October 2017: Hedge-Fund Types 3:1 Long of USD/JPY

The COT report can be a bit confusing when it comes to USD/JPY, the forex data in COT reports always report “the other currency vs dollar”, i.e. the report shows JPY/USD.

However, the analysis is the pretty much the same.

The report shows the funds getting slightly shorter of JPY/USD at 1:2.7, i.e. 1 long trade for every 2.7 short trades, i.e. nearly 1:3 short.

To make the reports more useful, just switch it around. I.e. the funds are nearly 3:1 long of USD/JPY.

Over the last 5 reports the ratio has been, 1:2.6, 1:2.5, 1:2.4, 1:2.2, 1:2.7 so not a great deal of change and still bullish of dollar/yen.


20 September 2017: This Isn’t Going to Plan

I was expecting a quick spike to ¥112.00 for a small profit.

Our trade is still in-play but 25pts underwater.

More importantly, later today we have the US Fed giving its thoughts on the next US rate rise.

The major concern here is that there is a quick spike downwards that closes this trade.

I’ve adjusted my limit order to ¥111.50, hopefully that gets taken out for a 16pt loss before any Fed announcements.

After that, I still:
  • arrow_forwardHave an EUR/USD trade which has much wider Stops and Limits
  • arrow_forwardLike the longer-term signals for USD/JPY and will be keeping an eye on the market

12:30pm Update – Spread Bet Closed for a Small Loss
With a tight stop loss I really didn’t want this trade open for the Fed meeting.

The market was just drifting downwards and there’s a chance of Fed being quite dovish.

I’ve manually closed this at ¥111.30 and a loss of 35.7 points = 35.7pts x £0.50/pt = loss of £17.85.

The market is now right in the middle of the long-term triangle discussed below. We will be coming back to that.



19 September 2017: New USD/JPY Spread Bet

The yen is not being helped by Prime Minister Abe considering a snap election or the tensions on the Korea peninsula.

USD/JPY has just passed the 200 day ma at ¥111.50 (line shown in green below).

The market is also flitting around ¥111.74, i.e. the major 61.8% retracement of the July-September drop.

The pair seems to be consolidating above ¥111.55, i.e. above Ichimoku cloud in the daily chart – also shown below.

The next resistance is all around the ¥112.00 level.

Also, according to LCG:

Call options trail from 110 to 112 at today’s expiry and should give support to the positive trend.
The RSI is at and 63.2 so we’re not is selling territory.

Trade Ticket Showing Stop and Limit Order Adjustments
Trade Ticket Showing Stop
and Limit Order Adjustments
On top of all this, the Bank of Japan meets again this week and it is expected to continue with its dovish policy.

On the opposite side of the trade, the Federal Reserve is semi-hawkish.

All of this suggests buying:

  • arrow_forwardA small buy and close at ¥112.00 is too tempting – see new trade set-up below
  • arrow_forwardOnce the market hits ¥112.00 I will wait to see if there’s a break to the upside – if so, I may buy again
  • arrow_forwardI’m also keeping an eye on the longer-term triangle for break – there could be a break in either direction
Very Short Term Speculative Buy
I’ve had a small £0.5 buy at ¥111.657 with tight Stop and Limit orders.
  • trending_upLimit order @ ¥120 = potential profit of 34.3 points x £0.5/pt = £17.50 profit
  • trending_downStop Loss order @ ¥110.9 = potential loss of 70.5 points x £0.5/pt = £37.85 loss

USD/JPY with 200 Day Moving Average
USD/JPY with 200 Day Moving Average


USD/JPY with Ichimoku Cloud


18 July 2017: USDJPY Buying Opportunity?

According to LCG: “USDJPY broke the major 38.2% retracement support at ¥112.32, i.e. the June – July rise and has now extended gains to ¥111.99.

“The weakness in the dollar is the main cause of the current drawback.

“Traders should be seeking dip buying opportunities as soon as the USD sell-off loses momentum.”

Also see Why the Trump Administration is Hurting the US Dollar.


Where Can I Spread Bet on USD/JPY?

Most FCA regulated spread betting firms offer live prices and charts on forex markets like USD/JPY.

See the FX comparison table below.


USD/JPY Spread Betting Comparison

navigate_beforeComparison Scroll navigate_next
Company Forex Min
Stake
EUR/USD
Spread
GBP/USD
Spread
EUR/GBP
Spread
USD/JPY
Spread
AUD/USD
Spread
Apply
Financial Spreads Review £0.50 0.7 0.9 0.8 0.8 0.8 Apply

Review
City Index Review £0 Variable Variable Variable Variable Variable Apply

Review
ETX Capital Review £0.50 0.88†† 1.19†† 1.32†† 1.38†† 1.14†† Apply

Review
IG Review £1-5 Variable Variable Variable Variable Variable Apply

Review


How to Spread Bet on USD/JPY

Let’s assume that you are considering taking a position on the Dollar / Yen FX rate, so you look on a spread betting site, such as IG, and they are offering the current spread of:

USD / JPY Rolling Daily: ¥77.655 – ¥77.665
Here is how it works

The Market USD / JPY Rolling Daily
The Spread ¥77.655 – ¥77.665
How This Works You can trade on the USD / JPY Rolling Daily market to move:

  arrow_upward  Higher than ¥77.665, or
  arrow_downward  Lower than ¥77.655

This spread betting market is a ‘Rolling Daily’ market and so there is no closing date for this trade. If you haven’t closed your trade and the trading session ends then your position will automatically roll over to the next trading day.

Note: if a trade is rolled over then you will either pay or receive a small fee for overnight financing based on whether you are speculating on the market to increase or decrease.

For further details see ‘Rolling Daily Spread Betting’.
Trading Units Spread bets on the USD / JPY market are priced in £x per point.

Where a point is ¥0.010 of the currency pair’s price movement.

E.g. if USD / JPY changes by ¥0.350 then you would win / lose 35 times your stake.
Stake per Unit You work out how much you would like to risk per point, e.g. £1 per point, £2 per point, £4 per point, £10 per point etc.
Simplified Trading Exercise With that in mind, if you have a stake of £5 per point and USD / JPY moves by ¥0.340 (34 points), you would win / lose £5 per point x 34 points = £170.

Fully Worked Spread Betting Example | Taking a Long Position on USD / JPY

Financial spread betting on the currency pair to go up

You Now Select Whether to Buy or Sell USD / JPY to push:

  arrow_upward  Higher than ¥77.665? or
  arrow_downward  Lower than ¥77.655?

Let’s Assume You Want to Go Long   arrow_upward  Higher than ¥77.665
You Select Your Stake Size, Selecting £2 per point
So Now What?
  • You make a profit of £2 for every point (¥0.010) USD / JPY goes above ¥77.665
  • You make a loss of £2 for each point (¥0.010) USD / JPY goes below ¥77.665
When Spread Betting on a Market to Go Up Your Profits/Losses = (Settlement Price – Opening Price) x stake per point
 
Trading Example 1 USD / JPY rises and the spread trading market is revised and moved to ¥78.092 – ¥78.102.
Time to Take a Profit? You could opt to let your position run or close it to lock in your profit. In this instance you decide to close your trade and sell at ¥78.092.
Your Profits/Losses = (Settlement Price – Opening Price) x stake per point
(¥78.092 – ¥77.665) x £2 per point (£2 per ¥0.010)
¥0.427 x £2 per point
42.7 points x £2 per point
Your Profits/Losses = £85.40 profit
 
Trading Example 2 USD / JPY decreases and the spread betting market changes to ¥77.160 – ¥77.170.
Time to Restrict the Loss? At this point, you could decide to leave your spread bet open or close it, i.e. close your position and limit your loss. In this instance you choose to close your trade by selling at ¥77.160.
Your Profits/Losses = (Settlement Price – Opening Price) x stake per point
(¥77.160 – ¥77.665) x £2 per point (£2 per ¥0.010)
-¥0.505 x £2 per point
-50.5 points x £2 per point
Your Profits/Losses = -£101.00 loss

Worked Trading Example | Going Short of the US Dollar / Japanese Yen Rate

Financial spread betting on the currency pair to go down

You Work Out Whether to Buy or Sell USD / JPY to go:

  arrow_upward  Higher than ¥77.665? or
  arrow_downward  Lower than ¥77.655?

Let’s Assume You Go Short   arrow_downward  Lower than ¥77.655
You Choose Your Stake, Let’s Assume You Opt For £4 per point
What Happens Now?
  • You make a loss of £4 for each point (¥0.010) USD / JPY increases above ¥77.655
  • You make a profit of £4 for each point (¥0.010) USD / JPY decreases below ¥77.655
When Selling a Market Your Profits/Losses = (Opening Price – Settlement Price) x stake per point
 
Trading Example 3 USD / JPY slips and the forex spread trading market is moved to ¥77.367 – ¥77.377.
Time to Lock in a Profit? You can choose to leave your bet open or close it to take a profit. In this case you decide to close your bet and buy the market at ¥77.377.
Your Profits/Losses = (Opening Price – Settlement Price) x stake per point
(¥77.655 – ¥77.377) x £4 per point (£4 per ¥0.010)
¥0.278 x £4 per point
27.8 points x £4 per point
Your Profits/Losses = £111.20 profit
 
Trading Example 4 USD / JPY climbs and the market becomes ¥77.973 – ¥77.983.
Time to Restrict Your Loss?At this point, you can decide to keep your bet open or close it, i.e. close your position to restrict your loss. In this case you choose to close your bet by buying at ¥77.983.
Your Profits/Losses = (Opening Price – Settlement Price) x stake per point
(¥77.655 – ¥77.983) x £4 per point (£4 per ¥0.010)
-¥0.328 x £4 per point
-32.8 points x £4 per point
Your Profits/Losses = -£131.20 loss

USD / JPY Notes:

  • Spread betting market taken from IG (IG Index) as of 10 November 2011
  • Many spreads platforms also allow you to speculate on USD / JPY in euros per point and US dollars per point
  • In addition, spread trading also lets you speculate on the movement of a wide range of other assets. For additional information also read:

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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