CADJPY Analysis

Introduction

The CAD/JPY is closely correlated with oil prices, as Canada’s economy relies on energy exports. A rise in crude oil often supports the CAD, while the JPY tends to appreciate during risk-averse market conditions. This pair is influenced by the commodity market, especially oil, and by interest rate decisions from both the Bank of Japan and the Bank of Canada.

Fundamentals and Interest Rates

The Bank of Canada policy is Dovish with the (BOC) current Interest rate 2.25%. Latest change was Oct 29, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.75% by latest change, Dec 19, 2025 (25bp).
(BOC) Higher interest rates generally lead to higher returns on investments denominated in CAD. This tends to attract foreign capital into CAD assets.

Based on the economic and macro fundamental data, The Fundamental Bias of CAD is Weak Bearish and for the JPY is -- Neutral.
Ziwox considering Weak Bearish bias for this asset and we expect prices to decline in the long-term.
Our Ziwox A, mid-term Fundamental Score for CAD is 3. and Fundamental Score for JPY is 4. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "Sydney & Tokyo", Market risk sentiment is Strong Risk-OFF. The United States Dollar and British pound recorded the strongest performance, while the Gold and Australian dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -10% decrease against us dollar.
Euro "EUR", performance has been -1% down so far
Pond "GBP", performance has been -0.91% down as of now
Australian dollar "AUD", has dropped by -1.19%
New Zealand dollar "NZD", has dropped by -0.93%
Japanese YEN "JPY", experienced -1.07% fall
Swiss franc "CHF", experienced -1.14% fall so far
Canadian dollar "CAD", has lost -0.94%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.Due to the market risk sentiment, CADJPY price reduction is likely. Becasue investors become risk-averse from CAD, seeking safety amid uncertainty or market turmoil, leading to a sell-off in riskier assets and a flight to safe havens like the USD, JPY, and gold. Currencies tied to riskier economies (e.g., AUD, NZD) tend to weaken.

Market Sentiment and Positioning

CAD COT (Commitments of Traders):

Institutions Net Position on >Canadian Dollar is -16046 included 77169 long, 93215 short and 25739 position changed from last week.
So they mainly have a bearish view on this asset and sold CAD for lower prices in long-term.
Last week 25739 repositioning Indicates closed positions and short-term profit-taking.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is -33933 included 104460 long, 138393 short and 10896 position changed from last week.
So they mainly have a bearish view on this asset and sold JPY for lower prices in long-term.
Last week 10896 repositioning Indicates closed positions and short-term profit-taking.

Retail Traders:

Crowd traders or Retail traders are bullish on the CADJPY with 77% 23% ratio. 0 long pos and 0 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability CADJPY prices may decrease.

Technical Levels and Support/Resistance

The CADJPY pair is approaching a critical technical support level near 111.860.
Technical trend is Sell, So If the pair continues to weaken, this support could become a significant area to watch for potential reversal or consolidation.
On the upside, there is key resistance near 114.277. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.