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? by s1190178
  2. 2. Contents ● Japanese Yen Becomes so Strong ● Yen / Dollar Historic Trends ● Expected The Opposite ● Currency Theory ● Summary ● References
  3. 3. Japanese Yen Becomes so Strong The Japanese Yen reached recently a 15-year high against the Dollar. And the question of reason that Yen is now so strong against the US Dollar is asked repeatedly for long period.
  4. 4. Japanese Yen Becomes so Strong The reason is the following combinations: - The strengthening its trend - The Japanese trade surplus - The expectation of monetary policy in the U.S. - The diversification of foreign reserves in other countries away from the U.S. Dollar and Euro
  5. 5. Yen / Dollar Historic Trends ● The overall trend of the Yen is getting stronger against the Dollar during the last 20 years. ● The exchange of Yen and Dollar rate has a fluctuating pattern with continuous lower and tops.
  6. 6. Yen / Dollar Historic Trends ● In this way, the strengthening of the Yen is that it fits well with the historic perspective of both the last 20 years as well as the last 3 years. ● Thus, there are no big surprises that the Yen is continuing this trend.
  7. 7. Expected The Opposite ● The economic situation of Japan doesn't seem good compared to the U.S.. So one may expect countries with a healthier economy to get a stronger currency. ● The domestic interest rates in Japan are one of the lowest interest rate in the world and it is not very attractive.
  8. 8. Currency Theory It is all about demand and supply. When there is relatively more supply and less demand for Yen’s, the Yen will weaken. And when there is more demand and less supply of Yen’s, the Yen will strengthen. The strength of a currency is changed by trade and current accounts. These are two sides of the same coin.
  9. 9. Summary Now there is a trend that the Japanese Yen is so strong against the U.S. Dollar. But it is not big surprise. Because the exchange of Yen and Dollar rate has a fluctuating pattern, the strengthening of the Yen is that it fits well with the historic perspective of both the last 20 years as well as the last 3 years.
  10. 10. References ● Why is the Japanese Yen so Strong | Stock Trend Investing Guide -http://www. stocktrendinvesting.com/blog/why-japanese-yen- so-strong ● Japanese yen - Wikipedia, the free encyclopedia -http://en.wikipedia.org/wiki/Japanese_yen ● Dollar - Wikipedia, the free encyclopedia -http: //en.wikipedia.org/wiki/Dollar

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