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Unformatted text preview: Japanese Yen: Our forecast for the Japanese Yen on 12/21/09 is 91.0 . Our forecasts for the Japanese Yen and are based on our US forecasts and the 3month forward rates published in the WSJ. The Japanese Yen exchange rate is affected by the following: Current account balance Japan holds a very large net creditor position. Its current account surplus is approximately $13.4 billion. 1 Thus, large capital outflows would be needed or else the Yen will appreciate relative to the US Dollar. This is reflected in a Financial Account of -$12.1 billion i.e. a Net Private Capital Outflow of $12.1 Billion helping provide stability to the currency. With a weak US and Global economy Japan has seen its exports fall by approximately 38.4% annualized (July 2009) 2 but the weaker economy has lead to a 41.1% annualized decrease as well. Thus resulting in a low amount of pressure on the currency exchange rate due to changes in trade account balances. With risk aversion having reentered the trading picture due to weak equities and economic results the JPY might strengthen....
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This document was uploaded on 10/27/2009.
- Spring '09