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QuestionWhat is a strong/weak Japanese yen?

Answer

A strong yen refers to a state where the relative value of the yen against other currencies is high. In other words, when the yen is strong, more units of other currencies can be exchanged per unit of yen. Conversely, a weak yen refers to a state where the relative value of the yen against other currencies is low (fewer units of other currencies can be exchanged per unit of yen).

For example, a Japanese tourist converts 10,000 yen to U.S. dollars for shopping in Hawaii. When the exchange rate is 1 USD = 100 JPY, the tourist will receive 100 U.S. dollars, which is calculated by dividing 10,000 by 100. However, if the exchange rate is 1 USD = 80 JPY, the tourist will receive 125 U.S. dollars (10,000 divided by 80). Furthermore, if the exchange rate is 1 USD = 125 JPY, the tourist will receive 80 U.S. dollars (10,000 divided by 125). When the exchange rate is 1 USD = 80 JPY, more U.S. dollars can be obtained for the same amount of yen than when the rate is 1 USD = 100 JPY, which indicates a stronger yen. In contrast, when the exchange rate is 1 USD = 125 JPY, fewer U.S. dollars can be obtained for the same amount of yen than when the rate is 1 USD = 100 JPY, which indicates a weaker yen.