GBP / JPY (British Pound / Japanese Yen)

How can You trade the GBP/JPY?

Trading the physical form of these currencies at the bank or financial institution of your choice is one of the oldest and safest methods available on the market. Traders, however, tend to favor other methods as this one does not offer quick or large returns on investments.


Leveraged derivative products such as futures and options are also a popular trading method, as traders only to invest a percentage of the actual price of the asset without owning it. The disadvantage is the risk of losing more than just your invested capital if your position goes south.


Contracts for Difference (CFDs) is where the trader open a position on the difference in the value of an asset when the trade was opened and when it was later terminated. This is, perhaps, one of the more popular trading methods available today, and is best used under the guidance of a regulated brokerage like CMTrading.


How can You trade the GBP/JPY?

The Great British pound and the Japanese yen’s relationship is affected by a number of factors, including but not limited to the imbalance in economic size with Japan’s economy being bigger than the United Kingdom and Germany combined.

This currency pair is also susceptible to economic events that take place in either country such as interest rate decisions, domestic political events in Britain, and geopolitical tensions between Japan and its neighbors in the East Asian region, Korea and China.

What to consider when trading the GBP/JPY?

During the past 10 years, the GBP/JPY has been more prone to high volatility than ever before with the yen-dollar acting as the main culprit. When the latter currency pair swings in either direction, the pound is often caught in the backwash.

In addition, the pound’s status as the smallest among the major reserve currencies makes it more vulnerable to sharp movements in trading bigger units such as the euro and American dollar.

Did you know?

Though the Great British pound is commonly used by the United Kingdom and the overseas British territories, the African country of Zimbabwe also uses the pound as its official currency.
Many other countries’ currencies are pegged to the GBP such as the Falkland Islands pound, Saint Helenian pound, Gibraltar pound, Manx pound, Scotland and Northern Ireland notes.