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Week11
The Japanese yen has strengthened over the past 20 years due to it being a currency with net inflows. More yen are bought than sold, leading to increased demand. This strengthening tendency is reinforced further by low returns on investments in other countries' foreign reserves, Japan's trade surplus, and monetary policies in the US and Europe. Historically, the yen has fluctuated but the overall pattern has been for it to grow stronger against the dollar. The strength of a currency is driven by balances of supply and demand - when demand exceeds supply, as it does currently for the yen, the currency strengthens in value.
Week11
- 1. Why is theJapanese Yen so Strong
- 2. Cause of thestrong yen the cause for the strengthening of the Yen is that the Yen is a currency with net inflows; more Yen are bought then that there are Yen sold. The reason of strengthening Yen is that Yen is the currency by the net inflow, More Yen is bought and it over there is sold Yen.
- 3. Tendency to reinforcement Thereason of this is a combination of tendency to reinforcement itself, and and a Japanese is the euro with low profit of the investment in diversification of the foreign reserve of other countries which left the world of the American remainder, the prospective monetary policy and U.S. dollar for a trade surplus.
- 4. Yen / DollarHistoric Trends 1 General tendency between the lasts letting you feel fine at 20 years inside, Yen becomes stronger for a dollar. The Yen/ dollar exchange rate has a pattern fluctuating at the top under the continuation, It has already taken place from mid-2007 to strengthen Yen in a current from the last top in a chart.
- 5. Yen / DollarHistoric Trends 2 In this way, the reinforcement of Yen is good for these 20 years and historic prospects in these 3 years and is anything correct. In this way, it is not right here not to hang the big thought either when Yen continues this tendency now.
- 6. Yen / DollarHistoric Trends 3 During the strange period just as a memo in these 20 years, it was 1993 – 1996 time frames. Then Yen was relatively very strong. I am interested to hear explanation to cover the period.
- 7. Currency theory We willrefer to continuous reinforcement of the dollar vs. Japanese yen. Why is it?In brief, it is all about supply and demand. When relatively much supply and Japanese yen remain, and there is demand, Japanese yen is weakened. When there is supply less than more demand and Japanese yen, I will strengthen Japanese yen.
- 8. Currency theory 2 ReinforcementYen means increase in demand for strong yen in comparison with relatively few power supplies (I sell one of Japanese yen and get other currencies in return) in this way. The strength of the currency trades · It is driven by balance of current account. These are one and indivisible.
- 9. Abstract aThe dollar andthe euro which are a combination of returns without enough investment in diversification of the foreign reserve in a world remaining part, American expectation monetary policy and other countries as for tendency to reinforcement in itself, the trade surplus of Japan as for this reason apart from the United States. At the historic point of view, the strong yen is not a new and unanticipated thing.
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