Direct answer
Pip value is the monetary change in your account that corresponds to a one-pip move in NZD/JPY. The basic idea is: take the pip size in price terms, multiply by the position size (lot), then express the result in your account currency using FX conversion rates.
Mechanism or definition
A “pip” is a standardized unit for price movement. In many forex quoting conventions, JPY pairs use a pip size of 0.01 (for example, a move from 155.20 to 155.21 is 1 pip). Some platforms use fractional pips (often called pipettes), so the first assumption to state is the pip size your platform uses.
To calculate pip value you also need:
- Position size: typically in lots. A standard lot is often defined as 100,000 units of the base currency (here, NZD in NZD/JPY). This lot definition is a stable convention, but exact contract sizes can differ by provider.
- Pip size in price terms: for NZD/JPY this is commonly 0.01, stated as an assumption.
- Account currency: if it matches the quote conversion path, no extra conversion is needed; if not, you convert.
Step 1: Convert one pip into base-currency units (price impact)
For NZD/JPY, the quoted price is JPY per 1 NZD. A one-pip move changes the quote by pip_size JPY per NZD. If you hold N NZD units, then the one-pip change in JPY is:
Pip value in JPY = (pip_size) × (N)
With a standard lot assumption N = 100,000 NZD, and pip_size = 0.01, that becomes:
Pip value in JPY = 0.01 × 100,000 = 1,000 JPY per pip
This is a simplified example that assumes standard lot size and the common pip definition.
Step 2: Express pip value in your account currency
If your account currency is JPY, the JPY result above is already your pip value.
If your account currency is not JPY, convert the JPY pip value into your account currency. A common way to think about it is:
Pip value in account currency = Pip value in JPY ÷ (NZD/JPY-derived conversion depends on your chosen FX pair for conversion)
Because the conversion depends on what market quote your platform provides between JPY and your account currency, the most robust independent method is:
- Determine which FX rate your platform uses to convert JPY into the account currency (for example, JPY→USD, JPY→EUR, etc.).
- Multiply or divide by that rate so the units cancel.
A unit-check approach prevents common mistakes. If you have a number in JPY and want account currency units, multiply by an exchange rate that expresses account currency per JPY, or divide by one that expresses JPY per account currency.
Evidence or example (with stated assumptions)
Assume:
- NZD/JPY pip size = 0.01 in price terms
- Standard lot size = 100,000 NZD
- Account currency = JPY
Then:
- One pip is 0.01 JPY per 1 NZD
- Your position is 100,000 NZD
- Pip value = 0.01 × 100,000 = 1,000 JPY per pip
Now assume instead your account currency is USD. You still start with 1,000 JPY per pip as the movement in JPY. Then you apply the platform’s available USD/JPY or JPY/USD conversion so units match:
- If you have a rate that gives USD per JPY, multiply by it.
- If you have a rate that gives JPY per USD, divide by it.
This second step is where pip value can differ across platforms or accounts, even for the same NZD/JPY movement, because the conversion rate and the quote convention used can vary.
Limitations and risks
- Pip convention varies: Some systems use fractional pips. If you assume 0. 01 but your platform uses 0. 001, your computed pip value will be wrong by a factor of 10. - Contract size may differ: While 100,000 units is common, always verify the contract/lot definition your provider uses for NZD/JPY. - Account currency conversion adds uncertainty: The pip value in money terms depends on the conversion FX rate used to translate JPY into the account currency. Even without changing the pip size, changing FX conversion rates changes the pip value you will see.