In USD/JPY, when the dollar interest rate is higher than the yen interest rate, the forward exchange rate is below the spot exchange rate (a weaker dollar and a stronger yen), and the forward points are negative. This is called a dollar discount. Conversely, when the forward exchange rate is above the spot exchange rate (a stronger dollar and a weaker yen) and the forward points are positive, it is called a dollar premium.
Forward points
- Japanese
- フォワード・ポイント
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
Forward points are the difference between the forward exchange rate and the spot exchange rate. They reflect the interest rate differential between the two currencies, and the forward exchange rate is obtained by adding the forward points to, or subtracting them from, the spot exchange rate.