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. |
| 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
Additional Info
Recent Posts on the Japanese Yen
- Trade Spotlight: Futures – Weekly Summary: Hogs, Yen (8/6/2021) - Trailed the stop loss lower on the Lean Hogs contract to lock in profit. Stop triggered on the Japanese Yen contract to take profit.
- Trade Spotlight: Futures – Weekly Summary: Yen, Hogs (7/30/2021) - Trailed the stop loss higher to reduce the risk on the Japanese Yen contract. Shorted the Lean Hogs contract on the breakout.
- Trade Spotlight: Futures – Weekly Summary: Sugar, Yen, Hogs (7/16/2021) - Stop triggered on the Sugar contract for a profit. Still long the Japanese Yen contract. Working a new Lean Hogs order.