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 2.75%. Latest change was Mar 12, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.5% by latest change, Jan 24, 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 -- Neutral and for the JPY is Moderate Bullish.
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 -2. and Fundamental Score for JPY is -3. So, base on the Fundamental Score, we predict mid-term upside price movement.

Market Overview & Performance

In the current trading session, "Tokyo & London", Market risk sentiment is Mix. The Yen and Switzerland Frank recorded the strongest performance, while the Australian dollar and United States Dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a 0.16% increase against us dollar.
Euro "EUR", performance has been 0.11% up so far
Pond "GBP", performance has been 0.02% up as of now
New Zealand dollar "NZD", has risen by 0.06%
Japanese YEN "JPY", experienced 0.19% rise
Swiss franc "CHF", experienced 0.17% rise so far
Canadian dollar "CAD", has gained 0.11%

Market Sentiment and Positioning

CAD COT (Commitments of Traders):

Institutions Net Position on >Canadian Dollar is -82156 included 23250 long, 105406 short and -11511 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 -11511 repositioning Indicates more sell positions and price pressure in short-term.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is 172268 included 194226 long, 21958 short and -4591 position changed from last week.
So they mainly have a bullish view on this asset and bought JPY for higher prices in long-term.
Last week -4591 repositioning Indicates closing positions, short-term profit-taking, or a general pessimism about prices.

Retail Traders:

Crowd traders or Retail traders are bullish on the CADJPY with 81% 19% ratio. 1409 long pos and 491 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 103.249.
Technical trend is BUY, If the pair continues to weaken, this support could become a good area to enter a long positions.
On the upside, there is key resistance near 105.732. Technically, A break above this resistance could signal a shift in momentum, but need to get a confirmation in this area due to the reversal or correction potential.