Which of the following could decrease the demand for yen in the foreign exchange market?
A) a higher inflation rate in Japan
B) higher interest rates in Japan
C) lower prices in the U.S.
D) a depreciation of the dollar
E) an appreciation of other currencies

Question

Quizplus · Accepted Answer

A higher inflation rate in Japan would make Japanese goods more expensive relative to foreign goods, reducing the demand for yen as fewer people would need it to buy Japanese products.

Which of the Following Could Decrease the Demand for Yen