Why is yen strong?
Yen is the official currency of the country, Japan. In its literal meaning, Yen means round object which, in its symbolic form, refers to a coin. It was not until 1870 when the Japanese government decided to make their own coins, naming it yen. This was possible because a mint machinery, an equipment used to make coins, was sold to Japan from the Hong Kong government. Because of this decision, Yen has come to exist even up to this time.
The economy of most countries in the world is in dire crisis. United States, Japan, Australia among others are striving to boost their economy and increase the cash inflow. It is a big issue today of how Japan’s yen remain strong despite the fact that Japan’s stock market is tumbling down and its exports are getting to the bottom of a pit. One economy analyst said that two complex factors make up a strong currency. That is, the country’s trade cash flows and investment cash flows. Japan, having a weak economy though, manages to maintain a strong yen primarily because of two reasons. First, Japan was barely affected by the over lending of banks across the world, making Japanese banks adequately able to function and in definite shape. The second reason is that there is a reduction of overseas investment by Japanese investors, thus reducing the amount of capital borrowed and increasing the cash inflows to Japan.
With the facts presented, it is not already surprising therefore how Japan gained the strength of its currency, Yen. Despite Japan’s weakening economy, it still has the safe haven power to invite investors and interest people to work together and prosper. Truly, Yen fought against the odds and proved to the world how it remained strong despite the crises.