Impact of Macroeconomic Conditions on the US-Japanese Yen Exchange Rate
Year: 2024
Type: article
Abstract: In 2024, the yen exchange rate is affected by Japan's exit from the eight-year negative interest rate policy and the possible interest rate cut in the United States, which is related to the global economy and financial market volatility. In this context, it is necessary to reassess the mechanisms that influence fluctuations in the US-yen exchange rate. This study examines the fluctuation of the US-yen exchange rate from 2010 to 2024, focusing on significant growth periods between 2012-2016 and 2020-2024, and a stable phase from 2016-2020. Utilizing the ADF test for stationarity, ACF, and PACF analysis for ARIMA parameter determination, data decomposition by using window and decompose function in R studio, the research reveals the influence of macro factors such as "Abenomics", QQE and YCC policies on exchange rate trends. The study finds that monetary policy, especially the differences between the United States and Japan, has a significant impact on exchange rates, with the depreciation of the yen and periods of economic stability attributed to the combined effects of global economic challenges and policy responses. The research provides valuable insights for investors and policymakers, emphasizing the importance of macroeconomic conditions on exchange rates in the context of a constantly changing global economy.
Author: Chenguang Zhao
Institution: Capital University of Economics and Business
Language: English
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4404867720