International Financial Management Report: JPY and KRW Exchange Rates

This report presents an analysis of the Japanese Yen (JPY) and Korean Won (KRW) exchange rates against the US dollar (USD) from January 2016 to December 2018, fulfilling the requirements of a FIN 241 group assignment. The analysis includes the calculation and graphical representation of exchange rate changes for both currencies over the specified period. The report discusses whether the JPY and KRW have appreciated or depreciated against the USD, supported by historical data. Furthermore, it explores the potential economic factors driving these currency movements, such as economic growth, government policies, inflation rates, and interest rates, with appropriate referencing to academic sources. The report also calculates and presents the indirect exchange rates for both currencies, providing a comprehensive overview of their performance in the international financial market. The findings highlight the impact of various economic indicators on currency valuation and offer insights into the dynamics of international financial management.

International financial management

TABLE OF CONTENTS
Exchange rate changes for each of the currencies...........................................................................3
Graph...............................................................................................................................................4
Appreciation and depreciation of currency over time against the US dollars.................................4
Reasons for the currency depreciation/appreciation........................................................................4
Calculation of the indirect exchange rates for both currencies........................................................5
References........................................................................................................................................7

EXCHANGE RATE CHANGES FOR EACH OF THE CURRENCIES
Table 1 Calculation of exchange rate
Date JPY/USD
Change
in value
Change in
%
KRW/
USD
Change in
value
Change in
%
18-Dec 0.0091100 0.000000 0.00% 0.00090 0 0
18-Nov 0.0088125 -0.000298 -3.27% 0.00089 -4E-06 -0.45%
18-Oct 0.0088540 0.000042 0.47% 0.00088 -0.000017 -1.90%
18-Sep 0.0087955 -0.000059 -0.66% 0.0009 0.000025 2.85%
18-Aug 0.0090000 0.000205 2.33% 0.0009 -5E-06 -0.55%
18-Jul 0.0089385 -0.000061 -0.68% 0.0009 2E-06 0.22%
18-Jun 0.0090350 0.000096 1.08% 0.0009 -1E-06 -0.11%
18-May 0.0091895 0.000155 1.71% 0.00093 0.000028 3.12%
18-Apr 0.0091465 -0.000043 -0.47% 0.00093 0.000009 0.97%
18-Mar 0.0094095 0.000263 2.88% 0.00094 8E-06 0.86%
18-Feb 0.0093745 -0.000035 -0.37% 0.00092 -0.000021 -2.23%
18-Jan 0.0091570 -0.000217 -2.32% 0.00094 1.4E-05 1.52%
17-Dec 0.0088740 -0.000283 -3.09% 0.00094 2E-06 0.21%
17-Nov 0.0088860 0.000012 0.14% 0.00092 -0.000018 -1.92%
17-Oct 0.0088000 -0.000086 -0.97% 0.00089 -0.000025 -2.72%
17-Sep 0.0088895 0.000089 1.02% 0.00087 -2.1E-05 -2.35%
17-Aug 0.0090930 0.000204 2.29% 0.00089 1.6E-05 1.83%
17-Jul 0.0090700 -0.000023 -0.25% 0.00089 4E-06 0.45%
17-Jun 0.0088985 -0.000172 -1.89% 0.00087 -2E-05 -2.24%
17-May 0.0090275 0.000129 1.45% 0.00089 2E-05 2.29%
17-Apr 0.0089650 -0.000063 -0.69% 0.00088 -0.000014 -1.57%
17-Mar 0.0089770 0.000012 0.13% 0.0009 0.000016 1.82%
17-Feb 0.0088665 -0.000111 -1.23% 0.00088 -0.000016 -1.79%
17-Jan 0.0088650 -0.000001 -0.02% 0.00087 -1.1E-05 -1.25%
16-Dec 0.0085550 -0.000310 -3.50% 0.00083 -0.00004 -4.61%
16-Nov 0.0087360 0.000181 2.12% 0.00085 2.1E-05 2.54%
16-Oct 0.0095400 0.000804 9.20% 0.00088 0.000026 3.06%
16-Sep 0.0098675 0.000328 3.43% 0.00091 3.3E-05 3.77%
16-Aug 0.0096685 -0.000199 -2.02% 0.0009 -0.000012 -1.32%
16-Jul 0.0097965 0.000128 1.32% 0.0009 3E-06 0.33%
16-Jun 0.0096815 -0.000115 -1.17% 0.00087 -0.000031 -3.45%
16-May 0.0090325 -0.000649 -6.70% 0.00084 -0.000027 -3.11%

16-Apr 0.0094015 0.000369 4.09% 0.00087 0.000032 3.80%
16-Mar 0.0088830 -0.000519 -5.52% 0.00087 0 0.00%
16-Feb 0.0088740 -0.000009 -0.10% 0.00081 -0.000065 -7.45%
16-Jan 0.0082605 -0.000613 -6.91% 0.00083 2E-05 2.48%
Table 2: Statement showing change in currency
Date (yy/mm) JPY/USD KRW/USD
18-Dec 0.00% 0
18-Nov -3.27% -0.45%
18-Oct 0.47% -1.90%
18-Sep -0.66% 2.85%
18-Aug 2.33% -0.55%
18-Jul -0.68% 0.22%
18-Jun 1.08% -0.11%
18-May 1.71% 3.12%
18-Apr -0.47% 0.97%
18-Mar 2.88% 0.86%
18-Feb -0.37% -2.23%
18-Jan -2.32% 1.52%
17-Dec -3.09% 0.21%
17-Nov 0.14% -1.92%
17-Oct -0.97% -2.72%
17-Sep 1.02% -2.35%
17-Aug 2.29% 1.83%
17-Jul -0.25% 0.45%
17-Jun -1.89% -2.24%
17-May 1.45% 2.29%
17-Apr -0.69% -1.57%
17-Mar 0.13% 1.82%
17-Feb -1.23% -1.79%
17-Jan -0.02% -1.25%
16-Dec -3.50% -4.61%
16-Nov 2.12% 2.54%
16-Oct 9.20% 3.06%
16-Sep 3.43% 3.77%
16-Aug -2.02% -1.32%
16-Jul 1.32% 0.33%
16-Jun -1.17% -3.45%

16-May -6.70% -3.11%
16-Apr 4.09% 3.80%
16-Mar -5.52% 0.00%
16-Feb -0.10% -7.45%
16-Jan -6.91% 2.48%
GRAPH
16-Jan
28-Jan
9-Feb
21-Feb
5-Mar
17-Mar
29-Mar
10-Apr
22-Apr
4-May
16-May
28-May
9-Jun
21-Jun
3-Jul
15-Jul
27-Jul
8-Aug
20-Aug
1-Sep
13-Sep
25-Sep
7-Oct
19-Oct
31-Oct
12-Nov
24-Nov
6-Dec
18-Dec
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
change in currency
JPY/USD KRW/USD
APPRECIATION AND DEPRECIATION OF CURRENCY OVER TIME
AGAINST THE US DOLLARS
By considering the historical data, it has been seen that The Japanese Yen against the USD $
have appreciated and the KRW against the USD $ also appreciated.

REASONS FOR THE CURRENCY DEPRECIATION/APPRECIATION
On the basis of historical data of exchange rates, it has been seen that the Japanese Yen against
the USD $ has appreciated. The reason behind the appreciation of Yen is the growing and
increasing economy of the country. The government also started various plans for enhancing the
exports, which leads to the higher demand for the currency of the country and the value of
currency has been increased. Along with this, extra government spending and good liquidity
from the bank of Japan also attract the investors to invest in Japan (Menkhoff et al. 2016). There
is less risk in the era of politics in Japan as compared with the United States, which significantly
affect the economic performance of the country.
Further, the currency of Korea also appreciated against the USD. The reason behind the same is
the inflation rate. It makes a significant impact on the value of the currency. Since the inflation
rate of Korea has less as compared with the US. Therefore it is the reason for appreciation in the
value of Korean currency. The financial organizations, institutions of Korea increase the interest
rates, it leads to a higher rate to lenders, and thus it captures more foreign capital, results in a rise
in the value of the currency (Moschella, 2015).
CALCULATION OF THE INDIRECT EXCHANGE RATES FOR BOTH
CURRENCIES
Table 3 calculation of indirect exchange rate
Date
USD/
JPY
(1/ Direct
currency
)
Change in
value
Change
in%
USD/
KRW
(1/ Direct
currency)
Change in
value
Change in
%
18-Dec 109.58 1,114.30
18-Nov 113.47 3.89 3.55% 1,120.44 1.00551 0.09%
18-Oct 112.94 -0.53 -0.47% 1,142.02 1.01926 0.09%
18-Sep 113.69 0.75 0.66% 1,110.15 0.972093 0.09%
18-Aug 111.04 -2.65 -2.33% 1,115.63 1.004936 0.09%
18-Jul 111.88 0.84 0.76% 1,113.25 0.997867 0.09%

18-Jun 110.68 -1.20 -1.07% 1,115.04 1.001608 0.09%
18-May 108.82 -1.86 -1.68% 1,080.59 0.969104 0.09%
18-Apr 109.33 0.51 0.47% 1,070.45 0.990616 0.09%
18-Mar 106.28 -3.05 -2.79% 1,061.26 0.991415 0.09%
18-Feb 106.67 0.39 0.37% 1,085.21 1.022568 0.10%
18-Jan 109.19 2.52 2.36% 1,070.08 0.986058 0.09%
17-Dec 112.69 3.50 3.21% 1,067.38 0.997477 0.09%
17-Nov 112.53 -0.16 -0.14% 1,088.13 1.01944 0.10%
17-Oct 113.64 1.11 0.99% 1,118.42 1.027837 0.09%
17-Sep 112.49 -1.15 -1.01% 1,145.30 1.024034 0.09%
17-Aug 109.97 -2.52 -2.24% 1,124.86 0.982153 0.09%
17-Jul 110.25 0.28 0.25% 1,119.40 0.995146 0.09%
17-Jun 112.38 2.13 1.93% 1,145.43 1.023254 0.09%
17-May 110.78 -1.60 -1.42% 1,119.65 0.977493 0.09%
17-Apr 111.55 0.77 0.70% 1,137.88 1.016282 0.09%
17-Mar 111.39 -0.16 -0.14% 1,117.65 0.982221 0.09%
17-Feb 112.78 1.39 1.25% 1,137.80 1.018029 0.09%
17-Jan 112.8 0.02 0.02% 1,151.65 1.012173 0.09%
16-Dec 116.89 4.09 3.63% 1,207.26 1.048287 0.09%
16-Nov 114.47 -2.42 -2.07% 1,177.80 0.975598 0.08%
16-Oct 104.82 -9.65 -8.43% 1,142.73 0.970224 0.08%
16-Sep 101.34 -3.48 -3.32% 1,101.91 0.964279 0.08%
16-Aug 103.42 2.08 2.05% 1,116.30 1.013059 0.09%
16-Jul 102.06 -1.36 -1.32% 1,112.24 0.996363 0.09%
16-Jun 103.29 1.23 1.21% 1,152.35 1.036062 0.09%
16-May 110.71 7.42 7.18% 1,189.74 1.032447 0.09%
16-Apr 106.36 -4.35 -3.93% 1,144.83 0.962252 0.08%
16-Mar 112.58 6.22 5.85% 1,144.97 1.000122 0.09%
16-Feb 112.69 0.11 0.10% 1,238.24 1.081461 0.09%
16-Jan 121.06 8.37 7.43% 1,208.11 0.975667 0.08%

REFERENCES
Menkhoff, L., Sarno, L., Schmeling, M. and Schrimpf, A., 2016. Currency value. The Review of
Financial Studies, 30(2), pp.416-441.
Moschella, M., 2015. Currency wars in the advanced world: Resisting appreciation at a time of
change in central banking monetary consensus. Review of International Political
Economy, 22(1), pp.134-161.