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American Dollar vs Japanese Yen

In: Business and Management

Submitted By bmitcher
Words 910
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This paper aims to compare the Japanese Yen against the US Dollar over a five year period starting from 2005 till 2010. The exchange traded fund for Japanese Yen shall also be discussed in the paper and afterwards an analysis of both the currencies shall be presented. There are different factors that influence the exchange rate differences between any two chosen currencies. The effects produced by these different exchange rates can be of quite different intensity. The most common elements that have an impact on exchange rate difference include economic factors, socio political factors and other behavioral or technical factors also. The macroeconomic factors such as growth of a country, employment rate, gross domestic product etc. All contribute in fluctuation of the country’s currency. (Adam & Vines, 2009) Exchange Traded Fund for Japanese Yen the exchange traded for Japanese Yen is more commonly called the Japan ETFS. These are a kind of exchange traded funds wherein the major assets are invested in equities that are traded on the Japanese stock exchange. The way Japan ETFS perform is dependent on two main factors which are firstly the actual performance of the equities on which investment has been made and secondly the exchange rate difference between the US dollar and the Japanese yen. The management of Japan’s Exchange traded fund is done in a passive way around an index like the MSCI Japan Index. Japan’s main stock exchange is the Tokyo stock exchange which is considered to be one of the most developed

stock exchanges in the whole of Asia and is a great source of attraction for investors all across Asia. Through Japans’ exchanged traded fund a single investment of diversified nature can be made within Japan by keeping in view the overall dynamics of the Us dollar and the Japanese yen Since the depth of the Japanese equity market is quite significant…...

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