U.S. Dollar / Japanese YenEducation
USDJPY~Currency Carry Trade~Forex Fundamentals
The upper pane is inverted USDJPY, ie JPYUSD.
THE lower pane is US10, or inverted US10Y.
When interest rate in US rises against/faster than/compared with interest rate in JP, the exchange rate of USJPY follows as well.
Investors will simply pull out the capitals from Japan and park them in US for better return. If you can rent out your resources at the price of 5%, why wasting them only earning 1%.
Capital tends to flow to the people/places/projects that can utilize it most.
THE lower pane is US10, or inverted US10Y.
When interest rate in US rises against/faster than/compared with interest rate in JP, the exchange rate of USJPY follows as well.
Investors will simply pull out the capitals from Japan and park them in US for better return. If you can rent out your resources at the price of 5%, why wasting them only earning 1%.
Capital tends to flow to the people/places/projects that can utilize it most.
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