For the CAD/JPY pair, the Canadian dollar is the base currency while the Japanese yen is the quote currency. This instrument is one of the most unpredictable currency pairs which dynamics is hard to forecast by technical analysis.
Due to the high sensitivity of the aforesaid currencies to different political and economic events, the use of the CAD/JPY trading instrument is not recommended for beginner traders.
Each currency of the pair above is influenced by oil prices; it sets a strong dynamics for the instrument. Both currencies respond to a hike of oil price antithetically. For example, while the Canadian dollar rises, the yen falls – in such case, a strongly pronounced uptrend arises.
The Canadian dollar, also known as 'loonie', is the seventh world currency by the trade volume; and it depends highly on the economic indicators of the USA and on raw material cost.
The Japanese yen is the third world currency by the trade volume. Due to the low inflation and high stability of the Japanese economy, the yen is regarded as a safe haven currency. Low interest rates make up contribute to the low value of the yen against other major currencies.