A stronger Japanese Yen is good for all of the following except: A. A foreign firm...
A stronger Japanese Yen is good for all of the following except: A. A foreign firm with existing investments in Japan B. A Japanese tourist abroad C. A U.S. exporter D. A Japanese firm with investments in the United States
Homework Answers
Option A is correct
When Japanese yen appreciates, other currencies will depreciate relatively. This indicates that a Japanese tourist will find it cheaper to travel abroad because with the same Japanese yen, she can purchase more goods and services abroad. Japanese firms that are investing in United States will find higher return in terms of stronger yen. Those who exports goods and services from the United States will find their exports increased because of cheaper goods and services after dollar depreciation. But a foreign firm that has investment in Japan, will receive a lower return after the strengthening of yen.
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