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Why is the japanese yen so strong
1. Why is the Japanese Yen
so strong?
s1180043
Mitsuru Abe
2. Why is the Japanese Yen so strong.
Yen is stronger than Dollar
Heavy debt
The trade cash flow
The investment cash flow
Investment in the Japanese economy
Summary
Outline
3. 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.
Why is the Japanese Yen so
strong.
4. Yen is stronger than the dollar If you look at the data of
the past 20 years. Yen is what fit well with the historical
perspective of both over the past three years as well as
the past 20 years. Therefore, there is no big surprise here
the yen has continued this trend at this time.
Yen is stronger than Dollar
5. The power of money in the country will become more
intense economic strength becomes strong to think
simply. Japan is also becoming stronger yen. However,
there is a large amount of debt in Japan. Amount of
Japan's public debt is twice of America.
Heavy debt
6. It is exported than imported Japan has a trade surplus.
This keeps the strong state the currency. There is a
possibility that imports will increase in the long term
reduce the exports strengthening currency. However, it is
possible to strengthen itself by reducing the supply of
yen needed to import in the short term. America is
importing more than you export it. Trade deficit of the
United States to weaken the U.S. currency.
The trade cash flow
7. Assets of Japan seems to be there is a strong demand
from foreign investors for money market instruments.
Demand for assets other than Japan is definitely more.
There is also a fact that recommends the Japan
government bonds for decades yen despite low levels
worldwide depositors of Japan.
The investment cash flow
8. Difference between the interest rates of Japan and the
United States will have the impact on the exchange rate.
Japanese interest rates were the lowest always. But when
raising the interest rates for the foreseeable future is not
expected, the United States expects the difference is
going to be big. , Carry trade will strengthen the yen
further. The same thing happens when to become
investment outside Japan to provide benefits or lower
risk than is expected.
Investment in the Japanese
economy
9. Therefore from that circle, the currency and net inflows,
cause of the yen has been caused by investors who are
buying the yen. The reason for this is that you have
diversification of foreign exchange reserves in the
United States and other countries strengthening trend
itself away from the United States, Japan's trade surplus,
the rest of the world, expectations and monetary policy
in the United States. It is not the thing yen can not be
expected in a historical perspective.
Summary
