Japanese Yen Futures

The 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
Contract Size	12,500,000 Japanese yen
Trading Hours	CME Globex: Sundays: 5:00pm – 4:00pm CT next day. Monday – Friday: 5:00pm – 4:00pm CT the next day, except on Friday – closes at 4:00pm and reopens Sunday at 5:00pm CT.
Trading Hours	CME ClearPort: Sunday – Friday 5:00pm – 4:15pm CT with a 45–minute break each day beginning at 4:15pm
Minimum Price Fluctuation	$.0000005 per Japanese yen increments ($6.25/contract) also for JPY/USD futures intra-currency spreads executed electronically.
Product Code	CME Globex: 6J
	CME ClearPort: J1
	Clearing: J1
Listed Contracts	Twenty months in the March quarterly cycle (Mar, Jun, Sep, Dec)
Settlement Method	Deliverable
Last Trade Date	9:16 a.m. Central Time (CT) on the second business day immediately preceding the third Wednesday of the contract month (usually Monday).
Settlement Procedures	Physical Delivery – JPY/USD Futures Settlement Procedures
Position Accountability	10,000 contracts
Block Trade Eligibility	Yes.
Block Minimum	150 Contracts
Exchange Rules	These contracts are listed with, and subject to, the rules and regulations of CME.
Source: CME Group

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