Recently, I started researching the Japanese yen in depth, and honestly, it’s more interesting than I thought. It’s not just Japan’s currency—it’s literally the third most traded currency in Forex after the US dollar and the euro. That already tells you something about its importance.

The story began in 1871, when Japan officially adopted this currency during the Meiji era. At that time, they divided it into 100 sen and 1,000 rin—basically fractions of the yen, like how we have cents and pennies. The Bank of Japan (BoJ) came later, in 1882, but that’s just a detail.

What surprised me is that Japan is the world’s fourth-largest economy by GDP, with 4.1 trillion euros. That explains why the yen carries so much weight in the markets. Many traders think it’s a rare currency, but the reality is that behind it there’s a serious economy.

Now, what’s truly fascinating is why the yen is considered a safe-haven asset. Basically, when there’s chaos in the markets, the yen tends to appreciate. This happens because Japan has a long-standing trade surplus, low interest rates for decades, and because Japanese people have the habit of repatriating capital when there are global turbulences. People trust Japan’s stability.

To verify this, look at what happened in three key moments. During the dot-com crisis of 2000, when the NASDAQ plunged 72%, the yen strengthened. Then in 2008, when Lehman Brothers went bankrupt and everything went to hell, the yen saw a brutal rally of +64% against the US dollar between 2007 and 2011. And in the COVID crisis—although it was shorter—the yen again proved to be a safe haven.

As for the USD/JPY pair, it’s one of the three most important pairs in Forex, along with EUR/USD and GBP/USD. It has volume, it has volatility, and that makes it perfect for trading. In fact, with leverage, you can amplify gains—though, of course, it also amplifies risks.

What recently happened is interesting. The dollar was appreciating sharply against the yen because the FED was raising rates while the BoJ kept rates negative at -0.10%. But at the end of 2022, the BoJ began buying yen and selling dollars from its reserves, which stopped that depreciation that had reached -51% since 2011. It was an effective move that was repeated afterward.

The factors that move the yen are varied. Positively: improvements in Japan’s GDP, an increase in exports, and rising demand from its major customers like China, the US, and South Korea. Negatively: worsening economic forecasts, problems with trading partners, or when there’s an oversell of yen in the market. Japan still carries the aftereffects of the real estate crisis of the 1990s, so any news about that affects the currency.

What’s clear to me is that the yen isn’t an exotic currency—it’s a currency with solid fundamentals. The USD/JPY pair offers real opportunities for traders because it combines volume with volatility. That said, if you use leverage, do it wisely. Start with a demo account, learn how it moves, and then gradually increase your exposure. The yen deserves respect, and the numbers prove it.