How is pip value calculated for EUR/USD vs USD/JPY?

Definition: what “pip value” means

Pip value is the money change you would expect from a one-pip movement in the quoted exchange rate for a given currency pair, for a specific position size and contract specification, expressed in your account currency.

A “pip” is a standardized price increment used in FX quoting. The pip size is usually tied to how many decimals appear in the pair’s quote.

Because different brokers and instruments may use different contract sizes (for example, different “units per lot”), pip value calculations always require assumptions about:

the pip size for the pair,
the position size (units or lots),
the contract value convention (how your instrument maps units to exposure), and
the conversion into your account currency.

Mechanics: common pip sizes for EUR/USD and USD/JPY

Most retail FX platforms quote:

EUR/USD with 5 decimals (e.g., 1.08543) and define 1 pip as a 0.00010 move in price.
USD/JPY with 3 decimals (e.g., 146.123) and define 1 pip as a 0.010 move in price.

This means the pip size differs:

EUR/USD: pipSize(EURUSD) = 0.00010
USD/JPY: pipSize(USDJPY) = 0.01000

Assumption to state up front: if your platform uses different pip definitions (for example, fractional pips shown as “pipettes”), adjust the pipSize accordingly.

Core formula: pip value in the quote currency

Let:

P be the current price of the pair,
pipSize be the one-pip increment for that pair,
Q be the position size in base currency units (e.g., EUR units for EUR/USD, USD units for USD/JPY),
pipValueQuote be the monetary value of one pip in the quote currency.

General approach

A one-pip move changes the pair price by pipSize, so the value change in quote currency is typically:

pipValueQuote ≈ Q × pipSize

This works cleanly when the pair is quoted in a standard “base/quote” format and your position exposure is expressed in base currency units.

EUR/USD example (formula form)

For EUR/USD, the base currency is EUR and the quote currency is USD.

pipSize(EURUSD) = 0.00010
Q = EUR units you control

So the one-pip value in USD is:

pipValueQuote(EURUSD) ≈ Q(EUR) × 0.00010 (USD per pip)

USD/JPY example (formula form)

For USD/JPY, the base currency is USD and the quote currency is JPY.

pipSize(USDJPY) = 0.01000
Q = USD units you control

So the one-pip value in JPY is:

pipValueQuote(USDJPY) ≈ Q(USD) × 0.01000 (JPY per pip)

Routing to your account currency (conversion step)

If your account currency equals the pair’s quote currency, pip value is already in the right currency.

If not, convert using an exchange rate you must assume and keep consistent with your quotation conventions.

Account currency conversion template

Let:

accountCCY = your account currency,
quoteCCY = the pair’s quote currency,
FX(accountCCY/quoteCCY) be the conversion rate you use.

Then:

If accountCCY is quoted as accountCCY per 1 quoteCCY, you use:
- pipValueAccount ≈ pipValueQuote × FX(accountCCY/quoteCCY)
If your rate is quoted in the opposite direction, you instead use the inverse.

Material limitation: FX quote conventions vary (for example, whether a displayed rate is accountCCY per quoteCCY or vice versa). Always confirm the direction of the conversion rate you apply.

A direct comparison: what changes between EUR/USD and USD/JPY

For the same base-unit exposure size Q and the same pip-definition logic:

EUR/USD pipSize is 0.00010, so one pip is a small price increment.
USD/JPY pipSize is 0.01000, so one pip is a much larger price increment (because JPY quotes are typically expressed with fewer decimal places).

But the money value per pip still depends on:

the position size in base units (Q), and
the quote currency conversion into your account currency.

So you can’t compare pip values across pairs using only the pipSize; you must include contract sizing and currency conversion.

Limitations and failure modes (important to verify)

Pip size may differ by platform: some quote fractional pip moves, and some redefine pipSize depending on instrument formatting. If pipSize is wrong, every pip value result is off.
Contract size / lot definition differs: “1 lot” is not guaranteed to mean the same base-unit exposure across all instruments.