The Japanese yen has strengthened recently due to high demand for yen from non-Japanese investors seeking Japanese assets. Japan also runs a large trade surplus, exporting more than importing, which increases demand for the yen. However, Japan's aging population and large public debt may slow economic growth and weaken the yen going forward.

1. Why is the Japanese Yen so
strong? What is its implic
ations for an export-drive
n economy like Japan? Repo
rt on the current status o
f the currency and what it
means?
● S1180056
●
Minoru Kobayashi

2. Menu

3. Expectation for
Japanese future
● The domestic interest rates in Japan are
lowest in the world.
●
Japan has an aging population and this m
ay temper the economic growth.
● Japanese public dept is big in Japan.
●
● -> weaken the Yen recently.

4. Curency Theory
● It is all about demand and supply.
● demand < supply -> yen will weaken
●
● Thus
●
●
Yen has more demand than supply.

5. About Supply and Demand
●
The strength of a currency is driven by
trade and current accouns.
● Exports from Japan cause demand.
● Import into Japan create supply.
● Investments from outside Japan cause dem
ad for Yen.
● The price goes up and then Yen becomes
●
stronger.
● Investments from Japanese investors outs
ide Japan create supply.
●
The price goes down and then Yen would w
eaken.

6. Trade and Incestment
● 1.Trade
● Japan has a trade surplus and is exporti
ng more than importing.
● Lower exporting than importing make the
currency strong.
●
● 2.Investment
●
● There seems to be a strong demand from n
on-Japanese investor.

7. Demand for Japanese Assets
● The expectation for the differences in i
nterest rate in Japan and the US will al
so have its influence on the exchange ra
te.

8. How strong Japanese Yen
● Japanese yen is always strong when massi
ve earthquake and nuclear disaster. It r
emains a tough currency.

9. Conclution
● Yen is the currency with net inflows
● more Yen are bought then that there are
Yen sold.

10. Reference
● Japanese lingualift.com
● http://japanese.lingualift.com/blog/yen-
insanely-high/
● INVESTOPEDIA
● http://www.investopedia.com/financial-ed
ge/0411/why-the-yen-is-so-strong.aspx
● GaijinPot
● http://forum.gaijinpot.com/showthread.ph
p?116799-The-Japanese-yen-why-is-it-so-s
trong