Why is the Japanese Yen      So Strong?    Business Writing: Week11     s1180035 Shota Furuya
Contents●   Japanese Yen is getting stronger●   Bad points in Japanese economy●   The reason of strengthening●   Demand fo...
Japanese Yen is getting stronger● Nowadays, the yen in Japan (JPY) is getting  stronger against the dollar in U.S. (USD).●...
Bad points in Japanese economy● Due to damages showed before, the finance  and economy of Japan doesnt look good,  compare...
The reason of strengthening (1/3)● The strengthening of Japanese yen is  caused by demand and supply of yen.● The increase...
The reason of strengthening (2/3)● These demand and supply is caused in  trades and investments.● In trades,  ○ Exports fr...
The reason of strengthening (3/3)● In trades,  ○ Japanese economy is based heavily on exports, so    the demand for yen in...
Demand for Japanese Assets● The demands for Japanese Assets come  from many aspects.● For example:  ○ Foreign reserves div...
Conclusion● Japanese yen is strengthening in last 20  years.● There are two reasons why Japanese yen is  strengthening:  ○...
References● Why is the Japanese Yen so Strong (Stock Trend  Investing)  http://www.stocktrendinvesting.com/blog/why-japane...
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Why is the Japanese Yen So Strong?

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Why is the Japanese Yen So Strong?

  1. 1. Why is the Japanese Yen So Strong? Business Writing: Week11 s1180035 Shota Furuya
  2. 2. Contents● Japanese Yen is getting stronger● Bad points in Japanese economy● The reason of strengthening● Demand for Japanese Assets● Conclusion● References
  3. 3. Japanese Yen is getting stronger● Nowadays, the yen in Japan (JPY) is getting stronger against the dollar in U.S. (USD).● JPY to USD rate has a fluctuating pattern, but is getting lower and lower since about 20 years ago.
  4. 4. Bad points in Japanese economy● Due to damages showed before, the finance and economy of Japan doesnt look good, compared with U.S. ○ The domestic interest in Japan is the lowest in the world. ○ Japan has an aging population, and this stops the growing of Japanese economy. ○ Japanese public debt is twice as U.S.s public debt.
  5. 5. The reason of strengthening (1/3)● The strengthening of Japanese yen is caused by demand and supply of yen.● The increase in strength of Japanese yen means there is more demand and less supply of yen.
  6. 6. The reason of strengthening (2/3)● These demand and supply is caused in trades and investments.● In trades, ○ Exports from Japan causes demand for yen. ○ Imports to Japan causes supply of yen.● In investments, ○ Investments from foreign countries causes demand for yen. ○ Investments from Japanese investors for foreign countries causes supply for yen.
  7. 7. The reason of strengthening (3/3)● In trades, ○ Japanese economy is based heavily on exports, so the demand for yen increases. ○ On the other side, U.S. economy is importing more than exporting. This causes the decreasing of JPY to USD rate.● In investments, ○ There are a demand for Japanese assets. ○ This demand is not very strong recently, however the more the strength of Japanese yen increases, the more the strength of demand increases.
  8. 8. Demand for Japanese Assets● The demands for Japanese Assets come from many aspects.● For example: ○ Foreign reserves diversification ○ Investors who wants a temporary parking place when they sell their other assets ○ Perceptions among market players ○ Expectations in interest rate between JPY and USD
  9. 9. Conclusion● Japanese yen is strengthening in last 20 years.● There are two reasons why Japanese yen is strengthening: ○ Japanese economy is based on exporting rather than importing. ○ The demand of Japanese assets is very increasing.
  10. 10. References● Why is the Japanese Yen so Strong (Stock Trend Investing) http://www.stocktrendinvesting.com/blog/why-japanese- yen-so-strong● Why The Yen Is So Strong (Investopedia) http://www.investopedia.com/financial-edge/0411/why- the-yen-is-so-strong.aspx● Japans in crisis: Why is the yen strong? (CNN) http://business.blogs.cnn.com/2011/03/17/japan%E2% 80%99s-in-crisis-why-is-the-yen-strong/

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