1. Why is the Japanese Yen
so strong? What is the
implications for an
export-driven economy
like Japan
s1190223
Kentaro Takakura

2. 1.Content
• Japanese Yen
• Yen/Dollar Historic Trends
• What does strong Yen mean?
• Suffer
• Trade Cash Flow
• Investment Cash Flow
• Conclusion
• References

3. 2. Japanese Yen
2. Japanese Yen• Japanese Yen is the official
currency of Japan• Third most traded
currency after Dollar and Euro• Officially
adopted by Meiji government on May 10, 1871

4. 3. Yen/Dollar historic trends
• From 1949 to 1971, the value of the yen is
fixed at 360 yen per 1 dollar
• The Yen is more stronger against Dollar
during the last 20 year
• Now in 2012 the Yen/Dollar exchange rate is
90 Yen per 1 dollar

5. 3. What does strong Yen mean?
• A official currency is called “strong” if: – It
is used widely in foreign exchange market –
Also used as a reserve currency
• The Japanese Yen is the third most traded
currency and the fourth most used as a
reserve currency=>Japanese Yen is an strong
currency

6. 6. Suffer
• The strong Yen might harming to economy –
The Japan trade surplus – Reduce the value of
export whereas Japan is one of the most
biggest export country – The low return on
investment

7. 7. Trade Cash Flow
• The export is more than import, so it cause
the Yen strong
• The Yen strong might reduce export and
increase import in the long term
• In the short term, it strengthening itself

8. 8. Investment Cash Flow
• There is a strong demand from foreign
investors for Japanese assets from China
• The demand assets from outside Japanese is
seem to be not very strong recently

9. 9. Conclusion
• The reason of the strong Yen is that Yen is a
currency with net inflows• It cause by the
combination of strengthening itself, the Japan
trade surplus, the low return investments…
• The strong Yen is nothing new and
unexpected

10. 10.References
•http://en.wikipedia.org/wiki/Japanese_yen
•http://www.stocktrendinvesting.
com/blog/wh y-japanese-yen-so-strong
•http://www.nytimes.
com/2012/08/02/world/ asia/strong-yen-is-
reinforced-by-japans- generation-gap.html?
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