Why the yen has risen? How is this works?

What are the reasons that establish how much a currency cost? If hypothetically the fair is raised in certain country “A” per example does he receive more investments and therefore his currency is lowered because of high demand? How is this works?





Thank you very much.Why the yen has risen? How is this works?
it is basically the buying and selling of the currency that determines the price of that currency. Simple supply and demand.





simple example: if you think that American stocks wont be doing well in the next couple years, and that you think that Chinese stocks would do better......you would have to change your USDs into Chinese Remimbis in order to buy those chinese stocks. Basically what you are doing is that you sold your USDs and bought Renmimbis. this would weakens the value of USD and strengthens Renmimbis.





another example: For years and years Americans have been buying Chinese products sold in Wal-Marts and many other retailers. At the end of the day, the Dollars Americans spent on these products ends up at as Chinese's manufacturer's hands as profits. Eventually they would change this USDs they earned to Renmimbis to pay their Chinese employees.





of course things gets worse when Americans started using their debts to buy Chinese products. Theyre basically strengthening the renmimbis by selling their Dollars which they dont even have yet!!!





as for your initial question about the YEN, there had been this phenomenon called ';The Carry Trade';. Over the 1990s Japan had lowered their lending interest rate until 0% to revive their economy. What happened was that the whole world Especially the US started borrowing money from Japan (who wouldnt want to borrow at 0% interest??), bringing back those YENs they borrowed and invested in US dollar denominated assets. as a result, the YEN plunged in value.





Today, what we are seing is that Banks, financial institutions and many more whom borrowed YENs earlier on started to cover their risk by paying off their loans to Japanese Banks.....as a result, they had to buy more and more YENs to pay their loans off. you see, their loans were in Yen, so as the value of Yens increased dramatically, their debts Also increased at a fast rate! this triggered a massive payoff of Yens loans.Why the yen has risen? How is this works?
General state of the economy


Debt


Gross domestic product


Inflation/deflation