Japanese Yen
The Japanese Yen
When Richard Nixon suspended the convertibility of US dollars to gold in 1972, the fixed rate between the dollar and the yen was exchanged for a floating rate. The international value of the yen rose sharply and is today one of the most attractive currencies on the market as it directs the world's second largest economy. The yen is controlled by a central bank known as the Bank of Japan or BOJ. This central bank is under the supervision of the Minister of Finance. Over the past decade, the yen has fluctuated greatly. From early 1990 through mid 1995, the yen doubled in value from 160/$ down to 80/$. From 1995-1998, the yen lost value and was back up in the 140's/$. The trend in the past year has been a steady increase in value for the yen. Over the past six months, the yen has fluctuated. From April through mid-July, the yen floated between 124/$ and 118/$. Since then it has increased in value falling to the area of 105/$.
On Friday September 24, the closing rate on the yen was 104.24/$. Over this next week, the yen rose to a close of 105.0000/$. This means that the yen lost a little value in comparison to the dollar. This slight fall is not representative of what is going on with the yen however. Over the past few months, investors have put money into Japanese stocks. The government is putting pressure on the BOJ to increase the yen supply in order to stave off inflation and curb long-term interest rates. This pressure came after a G-7 meeting in which the members suggested that Japan do something to weaken the yen. Prices and wages are falling and output is below Japanese productive potential. Despite these factors, the BOJ is hesitant about responding because it is concerned that expanding the yen supply will cause inflation. Last week, Japanese companies were becoming more optimistic about economic growth. The BOJ didn't take in cash from money markets on Sept. 30, leaving in twice the normal surplus, so traders felt that the BOJ would follow the idea of expanding the yen supply. The BOJ is conducting a survey on Monday Oct. 4 to see how optimistic business sentiment is as the economy tries to rebound. The yen could rise this next week to its highest level since that 1995 value of 80/$.
Sukirno (2004) states that foreign exchange rates or foreign exchange rate is the price or value of a country's currency is expressed in another country's currency, or it can also be interpreted as the amount of domestic currency needed to get one unit of foreign currency. Meanwhile, according to Mankiw (2013) the exchange rate between two countries is a rate agreed resident of both countries for mutual trade with one another. Economists distinguish between the exchange rate being two (Mankiw, 2013), namely:
Most analysts predict that Japan will be forced to issue stimulus funds or even inject helicopter money directly into the economy, which would increase the debt even further. That 's just one example of the current problem of central banks accepting overvalued asset prices, or financial bubbles, at face value.
undervalue of yen was the reason of Japan's huge trade surplus. In order to impr...
Long has it been taken for granted that all countries must have their own domestic currency with reasons ranging from trading issues to fiscal revenues and other financial variables. When taking a look at the argument for the trading issues it can be said that modification flexibility of the exchange rate allows domestic governing authorities to alter relative prices by depreciating the domestic currency in such a fashion that encourages exports and at the same time discouraging imports. There are several arguments on the financial side, which all relate to central banks money printing abilities and their power to adjust the value of their currency, thus making them to detach the domestic financial markets from the conditions established in the international ones, and to perform as a lender of last resort when a crisis threatens the domestic financial system. Seigniorage, which involves the domestic government being able to tax the domestic currency, is definitely an argument on the fiscal side. If the need for more money in the form of bills and coins arise, the government can produce them as “no interest” coins and bills and are allowed to do with it what they see fit. Most, if not all, of these advantageous characteristics are threatened when a country decides to dollarize.
The purpose of this is to draw attention to the invisible government which controls the United States. One of the means of control is the Federal Reserve System. Many of us have seen the recent decline of the dollar in the news. We will address this in terms of the Federal Reserve System’s control over the value of the dollar. Much of this is a concentration of quotes by noteworthy individuals such as Economists, Presidents, and Congressmen.
1) Japan still has the largest foreign currency reserves in the world even after years
Roosevelt cut the dollar’s ties with gold in order to allow the government to pump money into the economy and lower interest rates. This was ultimately to help get the U.S. get out of the Great Depression and deter people from cashing deposits and depleting the gold supply. In 1946 a majority of the world’s central bankers met to create a new global monetary system that would facilitate international trade, known as the Bretton Woods System. This allowed governments to sell their gold to the U.S. treasury, which at the time controlled two thirds of the worlds gold, at a set price of $35/ounce. There was a transition from gold being the base reserve currency as the U.S. dollar gained momentum and became the international reserve currency being linked to the price of gold. The U.S. dollar was chosen since the U.S. economy was the global leader in manufacturing and held the majority of the world’s gold and was the only currency still backed by gold. Being the reserve currency meant that other countries would maintain a healthy supply of dollars creating a stronger demand and helping support its
Measures of central tendency which include, the mean, median and mode, attempt to provide the centre point of the data set as wells as represent it with all with one value. Whereas measures of variability (range, interquartile range, variance and standard deviation) attempt to show the spread or difference in a data set. The mean, also known as the average, is the sum of all the values in a set of data divided by the number of values in said set. For example a class of 10 students were administered an IQ test.
Japan is a country full of respect, family importance, and extremely valued education. The official language in Japan is Japanese. This language is almost spoken exclusively within Japan. The standard version of Japanese is called hyōjungo and has very few sounds, compared to other languages such as English. Many experts believe Japanese is an Altaic, an Austronesian, or a Southeast Asian language. There are other theories, but none can be completely proven true. Almost all linguists believe it is an Altaic language, relating to Korean, Mongolian, and Turkish. This makes some sense seeing the fact that the Yayoi people seem to have migrated from Korea to Japan.
The Japanese Economy & nbsp;& nbsp;& nbsp;& nbsp;& nbsp; The prewar economy of Japan was a Socialist economy and the country was ruled by an emperor up to WW2 and after WW2 it started to lean towards a mixed market economy until what it is today, although its government is Socialist it is leaning towards a mixed market economy. & nbsp; The Japanese economy is a mixed economy that leans towards market, it is like this because almost all businesses are run by private corporations or people. and that is the market of the economy. And the reason that they are thriving and are so competitive is because of the trade tariffs and quotas that the government has in place. These regulations include heavy taxes on some products.
The gold standard broke down during WWI, as major belligerents resorted to inflationary finance. Governments effectively suspended the gold standard during World War I and financed part of their massive military expenditures by printing money. Further, labor forces and productive capacity were reduced sharply through war losses. As a result, price levels were higher everywhere at the war’s conclusion in 1918. Several countries experienced runaway inflation as their governments attempted to aid the reconstruction process through public expenditures. These governments financed their purchases simply by printing the money they needed, as they sometimes had during the war. The result was a sharp rise in money supplies and price levels. Most countries had lost gold while some had gained it. So, Gold Exchange Standard was put into force from 1925 to
Japan has one the most advanced economies in the world, with an advanced economy comes an advanced equity market. As other advanced equity markets are, the Japanese market is similar to the U.S. in its essential functions and its operation by the exchanges that allow its existence. The Japanese stock market is third largest in the world by market capitalization, surpassed only by the United States and China. Market participants trade over the Tokyo Stock Exchange and the Osaka Securities Exchange which combined to form the Japan Exchange Group (JPX) in 2013 (JPX.com). As of November 2015 there were 3500 companies listed as part of the JPX and over $400 billion dollars of shares traded in 2014 (World Federation of Exchanges).
Japan’s rising yen and the decline of the US dollar, East Asia Forum, 2011. Available at:
(FIX) Living in the world today, as a global society, we have become increasingly connected and continue to do so with each passing year. Individuals across the globe find it has become significantly easier to transport goods/services from country to country.
Daily in the USA about 38 million banknotes of various face value for total amount about 541 million dollars are issued (Facts about USA money).Dollars involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off of competitors of the USA in foreign markets. At the same time import to the USA owing to effect of a rise in prices restrains. Thus, for the USA changes in the exchange rate of dollar anyway bring benefits and advantages.Reduction of leading positions of the USA in world economy is assisted by the international role of dollar which remains the main reserve and settlement means in world monetary system. Foreign currency reserves of the central banks of other countries for 61% consist of dollars, nearly 2/3 calculations in world trade are carried out in dollars; the dollar serves as a measure of value of many important goods (for example: oil) in the world market; in dollars 3/4 international bank crediting is made (Aleksandr Popov). Changes in the exchange rate of dollar involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off...