Australian Dollar / Japanese YenAUD/JPY

AUD/JPY is the textbook risk barometer of the forex market. The Australian dollar is a high-yielder tied to commodities and Chinese demand; the Japanese yen is a low-yielder long viewed as a safe haven. The pair rises when global equities are buoyant and carry trades are in vogue, and sells off sharply during risk-off episodes — it is often more correlated with the S&P 500 than with classic forex drivers. Drivers also include RBA vs BoJ rate divergence, iron-ore prices and BoJ FX intervention threats. Spreads are tighter than most crosses given its popularity. Highly volatile in macro shocks — size positions accordingly.