Factors affecting the exchange rate of Japanese yen:
Japan's Ministry of Finance is the only department in Japan that formulates fiscal and monetary policies. Japan's Ministry of Finance has more influence on currency than the United States, Britain or Germany. Officials of Japan's Ministry of Finance often make some remarks about the economic situation, which generally have an impact on the yen. For example, when the Japanese yen appreciates or depreciates relative to the fundamentals, officials of the Ministry of Finance will verbally intervene.
Interest rate. The overnight lending rate is the main short-term interbank interest rate, which is determined by the Bank of Japan. The Bank of Japan also uses this interest rate to indicate the change of monetary policy, which is one of the main factors affecting the exchange rate of the yen.
Ministry of Economic and Financial Policy. 200 1 1 6 officially replaced the former Ministry of Economic Planning.
The Ministry of International Trade and Industry is responsible for guiding the development of Japanese domestic industries and maintaining the international competitiveness of Japanese enterprises.
Nikkei 255 index. Japan's major stock market indices. A reasonable downward adjustment of Japan's exchange rate will boost the share price of export-oriented enterprises, and at the same time, the entire Nikkei index will also rise.
The influence of cross exchange rate. For example, the rise of Euro/Yen will also cause the rise of USD/Yen, which may not be due to the rise of the exchange rate of USD, but because the economic expectations of Japan and Europe are different.
Extended data:
Looking around, the yen will always plummet (depreciate) when the economy declines sharply, which is easily affected by the financial turmoil in Asia and other parts of the world, but the appreciation of the yen is often not closely related to the economic fundamentals.
Usually, when the yen appreciates, Japan's economy is not ideal, and it has just bottomed out. The appreciation of the yen is large, usually climbing more than 10% at a time, which is closely related to Japan's economic characteristics and the international foreign exchange market.
In addition, Japan generally returns to around 1: 120 yen (about 1 yen: 0.83 cents) after each fluctuation, mainly because the economic strength of major European countries such as Japan and the United States has not changed significantly since the 1980s. Therefore, in the medium term, the yen usually returns to the long-term equilibrium price after another period of fluctuation.
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