Week 2 Discussion 2 Response to: COLLAPSE SUBDISCUSSIONCherita Cherita Looking at the history and researching great reasoning for the Japanese Yen currency, purchasing 10k in this currency should definitely appreciate quickly within the next few weeks. Looking at the historical rate table, from June 2021 to June 2022, the rate went from 108.993 to 136.667. That is over a 25% increase within one year during the end stream of a recent global pandemic. Within the past few weeks starting from June 1st, the appreciation table showed a starting rate at 129.101 and as of today, 3 weeks later, it is 135.25. That shows a 4% increase within a couple weeks. Purchasing 10,000 Yen currency units today with a prediction of a 2-4% increase for that currency, within the next 3 weeks, the foreign currency will appreciate very quickly to me earning 400 yens currency. Looking at the previous year, this prediction of an increase of at least 2%. Converting to USD, today’s rate (135.25) of 10k Yen will be $74 US dollars . The XE site gives the importance of the Yen currency stating, “The Japanese Yen is the third most traded currency in the world, and the most heavily traded currency in Asia. Due to its relatively low interest rates, the Japanese Yen is often used in carry trades with the Australian Dollar (Links to an external site.) and the US Dollar (Links to an external site.)”(www.xe.com/currency/JPY.2022 (Links to an external site.)). The country alone has shown reasons as to how committed they are to their currency and economy by their inflation rates alone staying low even during a global event. This is due to them not being stabilized with exchange rates with other countries from the national government, they have their own power when it comes to purchasing. This is a great factor to consider when it comes to international trading as the Yen currency is involved in all foreign transactions and not tied to just one country. This diversified exchange provides more liquidity and power to the currency and the economy of Japan. Though JPY to USD may not seem a lot when converted into US dollars, keeping the currency and investing within that same currency especially with the country’s flexibility of having their own purchasing power with the exchange rates will surely be favorable and an advantage for all international operations. References XE. (2016, September 9). Current and historical rate tables (Links to an external site.). Retrieved from http://www.xe.com/currencytables/ (Links to an external site.) Eun, C. S., Resnick, B. G., & Chuluun, T. (2021). International financial management (9th ed.). Retrieved from https://www.vitalsource.com Chapter 5: The Market for Foreign Exchange Chapter 6: International Parity Relationships and Forecasting Foreign Exchange Rates Chapter 7: Futures and Options on Foreign Exchange
