Research Regarding One Foreign Currency

Research Regardingoneforeign Currencyyour Research On Your Assigned O

Research regarding one foreign currency: Your research on your assigned or selected foreign currency should include the following: · Background information about the currency (e.g., historical exchange rate, trend, volatility, etc.). Need citation. Limit to one page of text (typed, double-spaced, 11 or 12-font size and 1 inch margins on all sides.

Paper For Above instruction

The Japanese Yen (JPY) serves as the official currency of Japan and is one of the most traded currencies in the foreign exchange market worldwide. Its historical background reveals a complex evolution, reflecting Japan’s economic transformations and geopolitical events over the centuries. Originally, Japan’s currency system was based on the mon in the 8th century, but the modern Yen was established post-World War II in 1949, replacing the Yen-yen system, and linking it to the U.S. dollar initially at a fixed exchange rate. Over the decades, the Yen has experienced significant fluctuations, driven by Japan’s economic policies, external shocks, and global financial trends. Notably, during the 1970s and 1980s, the Yen appreciated sharply following the Plaza Accord of 1985, which aimed to devalue the U.S. dollar against major currencies, including the Yen, to address trade imbalances. This appreciation affected Japan’s export-driven economy and shifted the currency’s volatility patterns (Miyamoto, 2015). In recent years, the Yen has been characterized by periods of volatility influenced by monetary easing policies under the Bank of Japan, global pandemic impacts, and geopolitical tensions affecting investor sentiment globally (IMF, 2022). The exchange rate trajectory of the Yen has shown cyclical trends with episodes of appreciation and depreciation. For instance, from 2012 to 2013, the Yen depreciated substantially due to aggressive monetary easing policies—an effort to stimulate economic growth through 'Abenomics'—yet it experienced periods of appreciation during global financial uncertainties, such as the COVID-19 pandemic in 2020. Market analysts observe that the Yen’s volatility remains relatively high compared to major currencies like the USD or EUR, partly owing to Japan’s large current account surpluses and interventionist monetary policies (Bank of Japan, 2023). Therefore, understanding these historical and current trends is essential for investors and policymakers to anticipate future fluctuations, especially considering Japan's significant role in international finance and trade.

References

  • Bank of Japan. (2023). Monetary Policy and Exchange Rate Trends. Retrieved from https://www.boj.or.jp/en
  • International Monetary Fund. (2022). Japan: Financial System Stability Assessment. IMF Publication.
  • Miyamoto, H. (2015). The Yen Appreciation and Japan’s Economy: Historical Perspectives. Journal of Japanese Economy, 23(2), 45-67.

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