Why is the Japanese Yenso strong?s1180030 Keisuke Hashimoto
Contents•Actual Condition of Yen•Why is the Yes so strong ?•Yen/Dollar Historic Trends•Expected the Opposite•Currency Theory•Japans Trade and investment Cash Flow•Demand for Japanese Assets•My conclusion
Actual Condition of Yen・Yen is stronger than dollar recently a 15-year.Therefore, The competing power of exportgoods and earning power are decrease.・Strong yen is causing decrease of GDP anddownturn of business conditions.
Why is the Yen so strong?・The cause for the strong yen is that currencyis net inflows.・Profit of low investment in rest of the worldsector.・Japan expect monetary policy in the US.
Yen/Dollar Historic Trends・During the last 20 years in clear, the yen isstronger than dollar.・An exchange rate of Yen and dollar hasfluctuation pattern. Current yen/dollar trends fitpast fluctuation pattern.
Expected the Opposite・The domestic interest rates in japan is thelowest in the world.・Aging population of Japan attenuate economicgrowth compare to U.S.・Public debt of Japan is twice as many as U.S.
Currency Theory・A weak yen : When more supply and lessdemand.・A strong yen: When more demand and lesssupply.Now, Japan is more demand and less supply.So, a strong yen.
Japans Trade andInvestment Cash Flow・Japan is exporting more than importing andthe trade income is surplus. But this cause astrong yen.・To mend a strong yen, Japan should decreaseexport and increase import.・Japanese assets is popular from foreigninvestor to market instrument.
Demand for JapaneseAssets・Foreign reserves diversification cause astrong yen.・Japanese domestic interest is the lowest inthe world.・U.S. Federal Reserve conduct more activemonetary easing than Japanese bank.
My conclusion・Japan has a strong yen now. Japanese tradeis more export and less import. So, Japan hasa strong yen. A statesman have to solve thisproblem. Japanese domestic interest is thelowest in the world. A statesman consider theproblem but, cannot solve this problem.