USD/JPY is one of the most popular currency pairs traded in the global forex market, accounting for around 17% of overall daily trading volume as per some estimates. It is known as the second most liquid currency pair worldwide and can see sharp, sudden moves which can offer interesting opportunities for forex traders looking to make some pips.Japan is the world's third largest economy, after the US and China, and the Japanese yen is the third major international currency. Japan, being a trade-dependent economy, likes to keep the value of the JPY weak to earn higher revenues.USD/JPY sees significant price action during the release of key economic data, changes in the monetary policy by the Federal Reserve and the Bank of Japan (BOJ), political developments in the US and Japan, and any major market moving events taking place around the world. This is because the JPY is considered a safe haven currency, which traders like to turn to in terms of high volatility and uncertainty in financial markets.Key economic events that affect the exchange rate of the US dollar and the Japanese yen include the release of GDP, employment, inflation, trade balance as well as manufacturing and services sector activity reports. In addition, any changes made by the Fed or the BOJ to the interest rates also cause movements in the USD or the JPY respectively.