Why is the Japanese Yen so strong? What is its implications for anexport-driven economy like Japan?
Contents・Introduction・History・Yen / Dollar Historic Trends・Expected the opposite・Affect・Japanese export suffers・Summary・More Information
Introduction・Strong yen is the situation that relative value ofyen is higher than a level in world market.・The converse situation is week yen.・Strong yen have an affect to economicenvironment.
History1971 The first strong yen recession1975- Change from strong yen to week yen.1990 The strong yen again.2010s Max of strong yen value is peak by Tōhoku earthquake and tsunami.
Yen / Dollar Historic Trends・The unusual period in the last 20 years was in the 1993 –1996 time frame. The Yen was then relatively very strong.・The overall trend during the last 20 years in clear; the Yen isgetting stronger against the Dollar.・It exchange rate has a fluctuating pattern with continuous lowertops.
Expected the opposite・The domestic interest rates in Japan are about the lowest in theworld and not very attractive to park your money.・Japan has an aging population and this will temper the economicgrowth in Japan compared to the more vibrant demographics in theU.S..・Japanese public debt as a percentage of GDP is about twice thesize of the U.S. public debt.
Affect・Strong yen means that it have an effect in the worldmarket.・By provision of strong yen depression, preventing toforeign of company bring economic downturn.・Strong yen depression create an adverseresult secularly.
Japanese export suffers・Strong yen cause downturn in economy including cutdown gross domestic product and net export.・By affect of strong yen, Business performanceof exporting company decline.
Summary・ The cause for the strengthening of the Yen is that the Yenis a currency with net inflows. And more Yen are bought thenthat there are Yen sold.・ The expected monetary policy in the U.S. and thediversification of foreign reserves in other countries awayfrom the U.S.
More Information・ http://www.stocktrendinvesting.com/blog/why-japanese-yen-so-strong・http://www.time.com/time/business/article/0,8599,1722557,00.html・http://www.relocatemagazine.com/corporate-finance-a-tax/finance-a-tax-articles-corporate/2137-the-japanese-yen-what-happened-