1. Why is the Japanese Yen so Strong
s1180091
Masayoshi Kataoka
2. Contents
•
Introduction
•
Yen/Dollar Historic Trends
•
Expected the Opposite
•
Demand for Japanese Assets
•
Case of Currency Impact
•
The Strong Yen Characteristics
•
Conclusion
•
Reference
3. Introduction
●
Recently, the Yen was the highest level the
currency has hit.
●
I think that why the Yen so strong and I
want to know that reason.
●
Here are the research and conclusion on it.
4. Yen/Dollar Historic Trends
●
The Yen/Dollar exchange rate has a
fluctuating pattern with continuous lower
tops.
●
The Yen is getting stronger than Dollar
●
The Yen was then relatively very strong
before 1996 and after 1996.
5. Expected the Opposite
●
The domestic interest rates in Japan are
about the lowest in the world and not very
attractive to park your money.
●
Japan has an aging population and this
will temper the economic growth in Japan.
●
Japanese public debt as a percentage of
GDP is about twice the size of the U.S.
public debt.
6. Demand for Japanese Assets
●
Japanese assets coming from partly foreign
reserves diversification.
●
Japanese interest rates have always been
the lowest, but when the expectation is
that this difference is will become less big.
●
Thus, The same thing will happen in
outside Japan that are expected to become
more risky or providing lower returns.
7. Case of Currency Impact
●
The initial reaction in the currency markets
was a strengthening in the value of the yen
versus the U.S. Dollar in the earthquake on
March 11.
●
Thus, Japanese investors would pull their
money out of other countries and put it
back in Japan. And that’s exactly what did
happen.
8. The Strong Yen Characteristics
●
It’s a stable currency and a relatively
economy that’s not affected so much by
global crises.
●
But, when the yen gets too high, Japanese
companies can't sell their goods overseas
and this causes major problem for the
Japanese economy.
9. Conclusion
●
I knew why Japanese Yen so strong
alongside of Dollars.
●
I understand that Japanese Yen might need
from the market and Japanese government
that fund relief and reconstruction efforts
in Japan.
