I sincerely commend the great insights that you have highlighted regarding the performance of the Japanese Yen currency within the stock exchange market. Remarkably, the Japanese currency has been a major player in the global stock market. Most individuals in the stock market have resorted to acquiring the Japanese Yen currency because of the country’s economic stability and great performance. Most cities in Japan are considered trade harbors because of the country’s significant number of successful and mega-profit-making organizations (Bodie et al., 2019). Japan’s capital city Tokyo is also considered one of the world’s most reliable financial centers, which is also a significant aspect of the country’s economic growth.
The nation’s economic performance plays a significant role in ensuring that the value of the Japanese Yen is one of the dominant and most exchanged currencies in the forex markets. It is worth noting that the friendly Japanese Yen futures have provided it an upper hand in the forex markets. The stability of the interest rates in Japan has placed the nation’s currency as one of the most sought-after currencies in the global forex exchange market. This is because their currency’s purchasing power is not a proxy for external forces (Bodie et al., 2019). For example, the Central Bank of Japan does not have such power to influence the Yen valuation.
However, the Central Bank of Japan’s activities will greatly influence its currency’s valuation. For example, when the outcome from the Japanese treasury bonds, bills, and notes increases, the Yen value depreciates in proportion to the dollar. This is because more traders are willing to borrow cheaper Yens to invest in higher-yielding dollars (Bodie et al., 2019). The Japanese Central Bank has maintained the implementation of the low or weak yen policy, implying that the nation’s currency will be more attractive when other nations’ economies go into recession.
Reference
Bodie, Z., Kane, A., & Marcus, A. J. (2019). Essentials of investments. Mcgraw-Hill Education.