If a Japanese investor and a German investor both use euros to invest in the stock of a French firm and the value of the euro appreciates relative to the value of the yen, then

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Since the euro appreciated relative to the yen, the Japanese investor will be able to convert their earnings back into yen at a higher exchange rate than when they invested. Therefore, the Japanese investor will have earned a higher total return on the investment compared to the German investor. If the value of the euro appreciates relative to the value of the yen, then it means that the euro has strengthened and the yen has weakened. This would result in the Japanese investor having to use more yen to purchase the same amount of euros than before. As a result, the total return on the investment will be lower for the Japanese investor than for the German investor who invested the same amount of euros. Therefore, the Japanese investor will have earned a lower total return on the investment than the German investor.

If a Japanese Investor and a German Investor Both Use