Why is the Japanese Yen strong? S1150091 Tsutomu Sakai
SummaryNow, the question increase such as“Why is the Japanese Yen so strong?”This slides will show you the reasons.
Historic TrendsIt is clear that the Yen is getting stronger thanDollar while the last 20 years.
Japanese situationJapanese domestic interest rates are lower thanother country in the world.There are so many old people in Japan.GDP is about twice the size of U.S.
Why the Yen become strong?If the Yen was not to be needed in othr words,there is no demand, Yen is become to weak.On the other hands, if there is demand and lesssupply of Yen, Yen become strong.
Trade cash flowExports from Japan bring demand for Yen.Because the Japanese goods are sold.Imports into Japan create supply of for Yen.
Investment cash flowInvestments from outside Japan is bringdemandfor the Yen.This is connect to that the Yen is strong whenthere is more demand.Investments from Japanese investors outsideJapan bring supply.This is connect to that the Yen is weak whenthere is less demand.
Trade and invest of Japan and U.S.Japan is doing the trade surplus and exportingmore than importing.This is important to keep the strong.U.S is importing more than exporting.This weakens the U.S.
ConclusionWhy the Yen is so strong?Because Yen is currency with net.Thus, the more Yen are bougt that there areYen sold.