Japanese Yen?

Question

Why has the Japanese Yen suddenly shot up against other major currencies. Will it continue?

Keep it simple please, thanks.

Answer 1

The Japanese economy is on a roll.

Answer 2

The Yen has certainly increased in value against the Pound
and The Dollar, this has more to do with politics and policies
in the UK and US. The last week has seen the Yen gain against these currencies, the Yen is still higher than during August of last year. I would not expect in the near future enough significant change to warrant speculation.The Japanese economy is definitely not on a roll, holding it's own maybe. I think it's going to end up around
230 Yen to the pound. Hold off is my advice.

Answer 3

In Japan, they use YENs. That's why there is this thing called, "Foreign currency exchanges" where people going to Japan convert their currency into Japanese YENs. And no, you do not get any benefits of rounding up from fractions of a yen. If you buy Ray Bans in Japan, you paid with Japanese yen. With VERY rare exceptions, businesses in Japan are NOT going to accept foreign currencies. And even the few that do, they convert the foreign currencies to Japanese yens, first. You obviously do not understand how expensive things are in Japan. Millions of yens is nothing. A small house costs over 100 million yens. What would be considered a decent average lunch in other countries would easily costs over 5,000 yens in Japan.

Answer 4

The above are mostly correct, but another factor is that the conservative governments of both Abe and Koizumi finally shut the valve on the money that the Japanese government was hemoraging to insolvent private business and spendthrift municipalities. The small towns that borrowed tons of government money during the 80's in particular are have a rough time, and a number of the companies the government was propping up with bad bank loans have gone belly up, but the economy is finally entering a recovery phase and the increased value of the currency reflects increased optimism about the future of the Japanese economy.

Answer 5

The recent rise in the yen is because of the reversal of the "yen-carry" trade. Interest rates have been exceptionally low in Japan in recent years, and many Japanese and non-Japanese investors have found it profitable to borrow yen at extremely low rates, convert the yen into dollars, and invest in dollar denominated assets, which have historically yielded higher returns than yen-denominated assets. But, with the subprime mortgage mess, U.S. stocks, corporate bonds and other dollar denominated assets are suddenly losing money. In addition, the dollar has been gradually sinking against the yen because of the large U.S. trade deficits. Together, these forces have made the yen carry trade unprofitable. Many people are unwinding these transactions by selling their U.S. dollar denominated investments and converting the dollars they receive into yen, to repay their original yen-denominated loans. This, in turn, increases market demand for yen. Hence the increase in the value of the yen.

Answer 6

It is a "safe haven" currency. When things start getting sketchy in the world markets, investment money flows towards things with less risk. Some people buy gold, some, Swiss Francs, some make investments in currencies perceived to be safer (more conservative).

The US dollar is considered very risky right now due to the levels of debt of both the American Government, and the American consumer. Europeans have been selling dollar denominated investments and buying Yen denominated investments.

Answer 7

I'm not sure if the Japanese Yen will continue to increase its value, but the property price in fashionable area of Tokyo has gone up by 13% between January and July. I doubt the economy picks up drastically because the politicians are corrupt, they still stick to old way of doing business, and education is appalling without encouraging children to be creative and innovative.