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Investing in the Yen

Investing in the Japanese yen is ultimately up to the investor. The last couple decades of investing in Japanese yen have shown a primarily positive margin of return, although this investment is also potentially volatile. Having shown telltale sings of appreciation, a short-term investor may decide to take his money elsewhere. Between a reticent optimism of Japanese investing 2007, and the ambiguous plans of Hirohisa Fujii, Japan’s newly elected Japanese Minister of Finance, some are choosing to keep moving, while others see promise in this currency.

Although an element of risk has always been inherent to the practice, investors have been borrowing money in low-interest Japanese Yen, and then investing it in currency that bears a higher rate. Elizabeth Smith of the NuWire Investor suggested in September of 2007that “the yen's value will rise and that the Japanese government will be unable to artificially hold down its value for much longer... The yen carry trade is "a tsunami in the making."*

However, investors have consistently held on. If history serves as any guide, the former Liberal Democratic Party Administration intervened on the rise of the yen in 1994, curbing it’s increasing value, however minimally. Should the Japanese government intervene to stem the rise of the yen again, Japanese consumers may lose purchasing power, while the outlook for foreign investment will again become brighter for the world.

The present condition of the yen is .01102 in USD; or in other words, there are 90.73000 Japanese yen per US dollar. Because of constant fluctuations, keeping a keen eye on this investment is not unwise. Long-term investors, after all, have enjoyed the consistently low interest rates. To invest in the foreign currency market, also known as forex, one can search online through a variety of currency brokers, like CMS and OANDA.

*Smith, Elizabeth. “Invest in Japanese Yen,” Nuire Investor. 12, September 2007.

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Modified:01/24/2011
Reader Comments
Ghulam (Mon Mar 21st)
Insightful writing. The writer must have worked very hard.

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