If the Japanese yen is strengthening against the U.S. dollar, and the Japanese government wanted to boost exports, the central bank of Japan might well:

Question

Quizplus · Accepted Answer

If the Japanese yen is strengthening against the U.S. dollar, it means that it will take fewer yen to purchase one U.S. dollar. This makes Japanese exports more expensive to foreign buyers. By selling massive amounts of Japanese yen in the currency markets, the central bank can artificially weaken the yen and make exports cheaper, thereby boosting demand for Japanese goods. Choice A is incorrect because selling U.S. dollars would not directly affect the strength of the yen. Choice B is incorrect because buying Japanese yen would further strengthen the currency, worsening the situation for exporters. Choice D is incorrect because buying other hard currencies would not have a direct impact on the value of the yen.

If the Japanese Yen Is Strengthening Against the U