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 0.5% 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 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 -1. and Fundamental Score for JPY is 9. 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 Switzerland Frank are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -0.73% decrease against us dollar.
Euro "EUR", performance has been -0.3% down so far
Pond "GBP", performance has been -0.05% down as of now
Australian dollar "AUD", has dropped by -0.21%
New Zealand dollar "NZD", has dropped by -0.3%
Japanese YEN "JPY", experienced -0.06% fall
Swiss franc "CHF", experienced -0.36% fall so far
Canadian dollar "CAD", has lost -0.2%
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 -114806 included 18035 long, 132841 short and -7629 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 -7629 repositioning Indicates more sell positions and price pressure in short-term.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is 79500 included 176400 long, 96900 short and 18089 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 18089 repositioning Indicates that they are optimistic about higher prices in mid-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the CADJPY with 26% 74% ratio. 679 long pos and 1252 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability CADJPY prices may continue to rise.

Technical Levels and Support/Resistance

The CADJPY pair is approaching a critical technical support level near 108.956.
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 111.130. 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.