Best Forex broker to trade USDJPY with tight spreads - Roboforex
According to Traders Union, best Forex Brokers to trade USDJPY with tight spreads:
Roboforex - minimum commission and comfortable spread
Exness - minimum deposit and additional assets
IC Markets - low average spread and deposits in JPY
Pepperstone - favourable conditions for beginners
Admiral Markets - stable option for professionals
The Japanese yen ranks third in the list of world reserve currencies after the dollar and the euro, and is considered one of the most popular currencies for trading on the Forex market. For speculative and carry trade, traders prefer USD/JPY out of all trading assets involving the yen but spreads on it may be uncomfortable for small deposits and short-term strategies. TU specialists have selected for you the best brokers with tight spreads and loyal trading conditions – all for your profit!
Is USDJPY a good pair to trade?
Yes, due to high liquidity, stable volatility and a large amount of fundamental information, dollar/yen can be recommended for intraday deals and medium-term trend trading. Low BOJ interest rates make the yen a popular choice for carry trade strategies.
What affects the Japanese yen exchange rate?
The yen reacts speculatively to political and economic events in the Asian region, especially in China and Australia. Fundamental factors affecting the USD/Yen exchange rate are indicators of the national economy (mainly inflation and industrial production), stability of the global economy, low interest rates and BOJ currency interventions, trade turnover with the US, energy prices, geopolitical stability in the region.
What assets does USD/JPY correlate with?
At the time of publication, the USD/JPY currency pair has a stable positive correlation with European cross-assets EUR/JPY, GBP/JPY and Asian AUD/JPY and NZD/JPY, as well as with the Nikkei 225 stock index. In recent years, the correlation with spot gold (XAU/USD), the Eurodollar and the US S&P 500 has been lost, but Japan's economy remains highly dependent on energy resources, so the negative correlation with oil prices remains.
What is the best time for Forex trading for USDJPY?
The period of 00:00-03:00 (GMT), when the Sydney exchange is open and Tokyo exchange opens, as well as the end of the Asian session 07:00-09:00 (GMT) are considered optimal for USD/JPY deals. In the European session, the most effective time is considered to be 12:00-16:00 (GMT), and strong volatility is possible during 19:00-20:00 (GMT). Each trader chooses the trading period independently, depending on the strategy, time zone and financial goals.
TU specialists have chosen the best brokers for you according to several criteria. The value of any spread fluctuates during the trading session, but practice shows that the assessment of the minimum value is important only for short-term trading. For medium-term deals and longer strategies, it is the average spread that you should pay attention to, as sharp throws on older timeframes are leveled out. The average spread is also more objective when calculating commission costs.
TU analysts evaluated the USD/JPY dynamic spread on trading accounts with standard conditions and on ECN and RAW accounts. ECN accounts charge a fixed commission for 1 lot, and although according to brokers' specifications, there should be zero spread on such accounts, on the real market a small technical spread is always present.
Additionally, we studied brokers' possibilities to trade yen as a part of futures and options – it can be beneficial for hedging strategies. The results of the research are summarized in the table.
| Parameter | Roboforex | Exness | IC Markets | Pepperstone | Admiral Markets |
|---|---|---|---|---|---|
Minimum Deposit |
10 |
1 |
200 |
1 |
250 |
USDJPY avg. spread |
0,4 |
0,9 |
0,5 |
1,2 |
0,4 |
USDJPY min spread |
0,2 |
0,2 |
0,2 |
0,9 |
0,2 |
USDJPY max spread |
1,2 |
2,1 |
1,2 |
1,6 |
1 |
ECN/RAW spread |
0,15 |
0,1/0,2 |
0,15 |
0,2/0,2 |
0,1 |
ECN/RAW commission |
1,5 |
3/3,5 |
3,5 |
3 |
3 |
Deposit in JPY |
No |
No |
Yes |
Yes |
No |
Financial regulator |
FSC (Belize) |
FCA UK, BVI FSC, CySec, FSCA SA |
ASIC, CySEC, FSA, SCB |
FCA, ASIC, DFSA |
FCA UK |
Let's look at each broker in more detail.
The advantage of this broker is a low commission for ECN-account (only $1.5) and the level of minimum deposit available for beginners. Please note: the offered high leverage is dynamic, the broker has the right to change the leverage level independently in case of too high risk. Quarterly currency futures are offered as additional assets with yen. For the standard account, the average dynamic spread is kept below the market average. Licenses of regulators FSC (Belize).
| Minimum deposit | Leverage (max) | USD/JPY spread | Feels for 1 lot, $ | |||||
|---|---|---|---|---|---|---|---|---|
| min | avg | max | Standard | ECN | RAW | |||
|
10 |
1:2000 |
0,2 |
0,4 |
1,2 |
0,5 |
0,15 |
- |
1,5 |
The broker offers all types of trading instruments involving the yen: CFDs, and futures (including mini-contracts). The high spread on the standard account is due to a strong spread widening at the opening/closing of the trading day. In fact, the average spread during the main trading hours does not exceed 0.5-0.7 pips. A minimum deposit of $1 is offered for standard accounts, but for Pro, Zero and Raw Spread accounts it is $200. The technical spread on ECN and RAW accounts does not exceed 0.15 points, the size of the commission is at the level of the average market value. Licenses of regulators FCA UK, BVI FSC, CySec, FSCA SA.
| Minimum deposit | Leverage (max) | USD/JPY spread | Feels for 1 lot, $ | |||||
|---|---|---|---|---|---|---|---|---|
| min | avg | max | Standard | ECN | RAW | |||
|
1 |
1:2000 |
0,2 |
0,9 |
2,1 |
1,4 |
0,1 |
0,15 |
3/3,5 |
The broker requires a rather high minimum deposit for both standard and ECN accounts, and offers a small range of leverage. However, due to the connection to all Asian liquidity providers during the main trading hours, the average spread is guaranteed to be lower than that of the main competitors. There are no additional trading tools for the yen. IC Markets supports deposit and direct cash turnover in JPY. Licenses of regulators ASIC, CySEC, FSA, SCB.
| Minimum deposit | Leverage (max) | USD/JPY spread | Feels for 1 lot, $ | |||||
|---|---|---|---|---|---|---|---|---|
| min | avg | max | Standard | ECN | RAW | |||
|
200 |
1:500 |
0,2 |
0,5 |
1,2 |
0,9 |
0,15 |
- |
3,5 |
The minimum deposit of $1 is practically not used for operations with USD/JPY, especially since the leverage is offered quite low. The recommended initial deposit is not less than $10. The average spread on the Standard account and commission on ECN and RAW accounts is maintained at the average market level, but the technical spread on ECN accounts stably exceeds 0.1 points. There are no additional yen instruments. The broker supports deposits and direct cash transactions in yen . Licenses of regulators FCA, ASIC, DFSA.
| Minimum deposit | Leverage (max) | USD/JPY spread | Feels for 1 lot, $ | |||||
|---|---|---|---|---|---|---|---|---|
| min | avg | max | Standard | ECN | RAW | |||
|
1 |
1:500 |
0,9 |
1,2 |
1,6 |
1,3 |
0,2 |
0,2 |
3 |
High minimum deposit and small leverage together with a dynamic spread lower than that of competitors represent an excellent option for professionals. The technical spread on ECN accounts is virtually zero, the commission is standard. No additional yen assets are offered. License of the regulator FCA UK.
| Minimum deposit | Leverage (max) | USD/JPY spread | Feels for 1 lot, $ | |||||
|---|---|---|---|---|---|---|---|---|
| min | avg | max | Standard | ECN | RAW | |||
|
250 |
1:500 |
0,2 |
0,4 |
1 |
0,4 |
0,1 |
- |
3 |
Spreads and commissions are the main sources of a broker's earnings. Low or "tight" spread on Forex means that the difference between the buy price and the sell price in the broker's quotes is relatively small. Spread always depends on the global exchange situation, so it should be analyzed in dynamics. Low spreads with stable volatility indicate that there is a high level of liquidity in the market, technical analysis can be used and the situation for entry is favorable.
Evaluation of the size of commissions and spreads is a key factor in choosing a broker and trading asset. It is important for both beginners and experienced traders, because too high commissions can significantly reduce profits.
The Japanese yen accounts for about 4% of the world's foreign exchange reserves, yen assets "hold" about 29% of the world stock market, as well as the main currency pair USD/JPY accounts for almost 15% of the Forex trading volume and another 5-6% of yen cross pairs.
Note:
BOJ at the meeting on 19.04.2024 decided to abandon the policy of negative interest rates and raised the interest rate on overnight loans for the first time in 17 years (from -0.1% to 0%). There is no serious reaction in the global USD/JPY trend yet. Nevertheless, the yen remains attractive for long carry trade deals, as well as for short-term trading in the Asian session (overnight for Europe), which reduces the risk of speculation on European news.
👍 Pros
• High liquidity and stable volatility (for intraday trading)
• Speculative reaction to Japanese, Asian, American news and other force majeure (for scalping)
• Stable medium-term trends without pullbacks (for long-term deals)
👎 Cons
• Risk of currency intervention and BOJ manipulation
• Dependence on energy prices
• Speculation on any negativity with USD
• Sharp reaction to problems of large corporations
Trading of the Japanese Yen is considered complex in terms of fundamentals due to its close relationship with the Asian stock market, U.S. Treasuries and interest rates. The bulk of trading volume comes from the Bank of Japan's exchange trades, large commodity contracts, short-term options and other hedging operations.
USD/JPY dynamics are influenced by:
US, Japanese and Chinese statistics (interest rate, GDP, inflation, unemployment rate, CPI, PMI, BOJ Tankan Survey, etc.;)
statements of officials and financial structures of the USA, Japan, China
statements of the BOJ, Ministry of Finance of Japan, currency interventions
movement of commodity prices and stock indices in Asia (Hang Seng, KOSPI, Nikkei 225, SET50, Composite, TOPIX)
еconomic and political events in Japan
All political events and statistics the yen is faster and more reliable than any other currency. So if there is any panic in the market – sell yen!
Fundamental analysis of the yen is quite a complex process, but reasonable trading by technical analysis of both USD/JPY and major yen cross pairs (EUR/JPY, GBP/JPY, AUD/JPY) is quite accessible even for traders with minimal experience and a small deposit. The base pair USD/JPY reacts slowly to technical signals, so standard candlestick patterns for the yen are poorly worked out on periods below the daily one. The optimal period for candlestick analysis is M15-H4.
You are lucky: TU experts' real-time analysis of the market situation takes into account all global and regional news and macroeconomic factors affecting USD/JPY dynamics, and provides both target points for market entry and recommendations on maintaining open positions.
The average daily volatility of US Dollar vs Japanese Yen for 2023 is more than 115 pips. It is quite logical to trade USD/JPY this pair at the Asian session, especially at the beginning of 00:00-03:00 (GMT), when the Sydney session is open and Tokyo opens, and further in the period 07:00-09:00 (GMT), when the market gives the main reaction to statistics and news on JPY, AUD, NZD, Chinese economic data and other events in the Asian region.
Further speculators become active in the middle of the London session and the beginning of the New York session – 12:00-16:00 (GMT). During the American exchanges trading volumes on USD/JPY are gradually decreasing, but it is worth paying attention to the closing of large options on the yen, in this case a volatility rush is possible before the closing of the New York session – 19:00-20:00 (GMT).
The optimal time for trading each trader chooses independently, depending on the trading strategy, time zone and financial goals. All the brokers we analyzed offer dynamic spread on USD/JPY and provide the lowest spread during periods of high liquidity. So deals during these times have serious profit potential. However, trading during periods of high volatility also means higher risk.
When choosing a broker on USD/JPY, low spread is not the most critical argument, the broker must meet the minimum deposit, leverage and regulation requirements. You should choose a broker based on a few basic parameters.
Licenses of international regulators are mandatory, and it is also desirable for the broker to participate in investment protection programs, for example, the Financial Commission. Licenses of several regulators increase confidence in the broker (Exness, IC Markets, Pepperstone).
We remind you that besides currency pairs, there are many other derivatives involving Japanese yen traded on exchanges, and the main volume of such deals takes place on Asian trading floors. If you prefer deals with different Asian assets (and not only with yen), we recommend to cooperate with brokers with ASIC license (IC Markets, Pepperstone).
The broker's support of standard trading platforms allows a trader with any level of experience to start working at once. The availability of additional software (like Roboforex, for example) and analytics will be a positive argument for professional traders.
Carefully study the specification: if a broker declares a minimum deposit of $1, it does not always mean that it will be possible to trade USD/JPY. As a rule, a deposit of at least $50 is required for reliable deals with yen assets. The minimum deposit should not conflict with your risk management system.
USD/JPY spread is a dynamic average and does not always correspond to what the broker promises. Test the spreads/commissions on a demo account, study the information on external monitors. The broker's support of the deposit and cash flow in JPY (like, for example, IC Markets and Pepperstone) will help to avoid additional conversion losses.
The main value of the yen is that it is backed by Japan's powerful, multi-factor economy. JPY has been the world's second-largest reserve currency for decades, is considered a reliable asset for hedging risk, and is no worse than, for example, gold or U.S. bonds. Thanks to massive export revenues, Japanese companies are among the most active investors in the world.
Investors use the yen's ability to strengthen during crises to protect themselves from risk: they open a currency position directly or buy yen-denominated bonds.
In fact, the yen depends on only two factors: the state of the Japanese economy and BOJ decisions – just follow the actual information. The last official BOJ intervention was in 2011, but analysis shows that liquidity injections into the market are conducted regularly, and this is the main risk for short-term USD/JPY deals.
In today's market, avoiding contact with the yen is almost impossible. Many successful traders have grown up on its stable volatility and low spreads. Understanding the dynamics of the yen and the ability to successfully make money on Japanese assets is an excellent indicator of professionalism of any market player.
Traders Union applies a rigorous methodology to evaluate brokers using over 100 both quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
Regulation and safety. Brokers are evaluated based on the level/reputation of licenses and regulations they operate under
User reviews. Client reviews and feedback are analyzed to determine customer satisfaction levels. Reviews are fact-checked and verified
Trading instruments. Brokers are evaluated on the breadth and depth of assets/markets available to trade
Fees and commissions. A comprehensive analysis is done of all trading costs to analyze overall cost to clients
Trading platforms. Brokers are assessed based on the variety, quality and features of platforms offered to clients
Other factors like brand popularity, customer support, education resources are also evaluated
Brokers with low spreads always look attractive, but it can be difficult to make the right choice. For example, a broker may allow for USD/JPY a significant spread widening for standard accounts even in a stable market. ECN and RAW accounts, if you believe the advertising, should only charge commission, still have a small technical spread on which you can lose money. To make the best decision, you need to do a full-fledged research.
Trader's Union's team of experts has gathered information for you and analyzed brokers for trading USD/JPY with narrow spreads. Use this review and comparative characteristics to find a broker that meets your requirements and trading criteria. Profits to y’all!
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
