The US is one of Japan's biggest trading partners meaning the Yen is highly sensitive to US demand for Japanese electronics and cars.
USD/JPY represents the amount of Japanese yen that can be purchased with one US dollar. At the time of the Breton Woods System the yen was fixed to the US dollar at 360JPY per 1USD, but the exchanged only lasted until the US abandoned the gold standard in 1971. Since then the yen has appreciated significantly against the US dollar. The yen is the third most traded currency in world, behind the US dollar and the euro.
The US dollar can be influenced by US labor market data – including the monthly non-farm payroll (NFP) results and the unemployment statistics – US GDP and inflation data, interest rates and the Fed.
The yen is also sometimes thought of as a safe-haven trade, and the currency is sometimes hit with repatriation flows during times of economic crisis. Also, domestic data has an impact on the price of JPY, especially Japan’s trade balance, inflation, employment and GDP data.