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The strong Yen and its
impact to Japan economy
What is the strong Yen?
● According to currency theory, the two main
  metrics that impact to a currency:
  ○ Demand
  ○ Supply
● The strong Yen means that there is more
  demand while less supply of Yen.
Yen/Dollar Historic Trend
● The Yen is getting stronger than the Dollar
  during the last 20 years.
● There are many fluctuation in the change of
  Yen
● Currently strengthening of the Yen is at the
  same level as in mid 2007
The reason of the strong Yen
● Japan economy exporting value is more than
  importing value.
● Japanese assets is very attractive with non-
  Japanese investors
  -> a strong demand of Yen.
● While, demand for assets outside Japan is
  relatively little.
The impact of the strengthening of
Yen
● Positive aspects:
  ○ Supporting Japan's purchasing power oversea.
  ○ Concentrating on the corporations that operate on
    abroad markets.
● Negative aspects:
  ○ Making the Japan goods less competitive than the
    product on the outside Japan market.
  ○ Example:
    ■ Whenever Dollar loses 1 Yen in value -> Toyota
       loses 30 billion Yen per quarter.
The impact of the strengthening of
Yen(next)
● Currency losses
  ○ More than half of Japanese firms are considering
    moving some factories and office to oversea
  ○ The solution of the government seem to be not
    effective
● Power shortages
Conclusion
● The strong Yen is not a new issue but
  resolving it always have the highest priority.
● The balance between import and export of a
  economy is very important.
Reference
[1]http://www.stocktrendinvesting.
com/blog/why-japanese-yen-so-strong
[2]http://www.bbc.co.uk/news/business-
14526293
[3]http://www.nytimes.
com/2011/08/19/business/global/japanese-
finance-officials-meet-to-address-yens-
strength.html?_r=0

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The strong Yen