Exchange Rate Calculator

The exchange rate between the Canadian Dollar (CAD) and the Japanese Yen (JPY) has experienced notable fluctuations over the past few months, influenced by various economic factors and monetary policies. This report provides an analysis of the recent trends, technical indicators, and future outlook for the CAD/JPY currency pair.

Recent Trends and Historical Performance

In early January 2025, the CAD/JPY exchange rate was approximately 110.14. By mid-March 2025, it had declined to around 103.17, marking a decrease of about 6.3% over this period. This downward trend reflects the impact of several economic developments and policy decisions in both Canada and Japan.

Technical Analysis

As of March 28, 2025, technical indicators suggested a bearish outlook for CAD/JPY:

• Relative Strength Index (RSI): At 34.071, indicating a sell signal.
• Stochastic Oscillator (STOCH): At 33.152, also signaling a sell.
• Moving Average Convergence Divergence (MACD): At -0.17, reinforcing the bearish sentiment.

Additionally, all moving averages (MA5, MA10, MA20, MA50, MA100, and MA200) were below the current price, further supporting the strong sell recommendation.

Fundamental Factors Influencing the Exchange Rate

Several fundamental factors have contributed to the recent movements in the CAD/JPY exchange rate:

• Monetary Policy Divergence: The Bank of Canada (BoC) implemented an interest rate cut, while the Bank of Japan (BoJ) raised rates. This divergence has strengthened the JPY against the CAD.

• Oil Prices: Canada's economy is closely tied to oil exports. A decline in oil prices has negatively impacted the Canadian dollar, contributing to its depreciation against the yen.

• Trade Tariffs and Economic Indicators: Trade tensions and economic indicators have also played a role in the exchange rate dynamics. The CAD/JPY pair has been sensitive to global trade developments, with tariffs and economic data influencing investor sentiment.

Future Outlook

Analysts have varying forecasts for the CAD/JPY exchange rate:

• Short-Term Forecasts: Some projections anticipate the exchange rate to rise to 111.155 within three months, representing a 7.5% increase from the current rate.

• Long-Term Projections: Over the next five years, the exchange rate is expected to average around 110.9086, with a range between 109.7996 and 112.0177.

These forecasts suggest a potential recovery of the Canadian dollar against the yen, contingent on factors such as oil price stabilization and monetary policy adjustments.

Conclusion

The CAD/JPY exchange rate has been influenced by a combination of technical indicators, monetary policy decisions, and fundamental economic factors. While recent trends have shown a depreciation of the Canadian dollar against the yen, future projections indicate potential for recovery. Investors should closely monitor developments in oil prices, central bank policies, and global trade dynamics to make informed decisions regarding this currency pair.