Question

Who are the winners and who are the losers if a currency, let's say the yen, weakens?

Who are the winners and who are the losers if a currency, let's say the yen, strengthens?

Please include in your list exporters, importers, consumers, tourists, international students among other stakeholders.

To make sure that your answer is clear, write one section on the first question and one section on the second question.

Answer 1

Who are the winners and who are the losers if a currency, let's say the yen, weakens?

If Yen weakens, this simply means Yen becomes cheaper and say our home currency USD becomes expensive. As long as you understand this, you should be able to figure out the impact as stated below:

• American importers (from Japan) who need to pay in Yen, will find Yen cheaper and hence will be the winners. For the same reason, Japanese exporters will be winner.
• American exporters (to Japan) who receive payments in USD will be the loser as USD will be expensive for Japanese importers. For the same reason, Japanese importers will be loser
• International students coming from Japan to USA, will be loser because they need to convert Yen into USD. International students from USA and going to Japan will be winner.
• Tourists coming to USA from Japan will be loser, tourists from USA to Japan will be winner
• Consumer in both the countries should be at par because they have access to the entire basket of goods - either imported or made in house. So, they should be unaffected.

Who are the winners and who are the losers if a currency, let's say the yen, strengthens?

If Yen strengthens, this simply means Yen becomes expensive and say our home currency USD becomes cheaper. As long as you understand this, you should be able to figure out the impact as stated below:

• American importers (from Japan) who need to pay in Yen, will find Yen expensive and hence will be the loser. For the same reason, Japanese exporters will be loser.
• American exporters (to Japan) who receive payments in USD will be the winner as USD will be cheaper for Japanese importers. For the same reason, Japanese importers will be winner
• International students coming from Japan to USA, will be winner because they need to convert Yen into USD. International students from USA and going to Japan will be loser.
• Tourists coming to USA from Japan will be winner, tourists from USA to Japan will be loser.
• Consumer in both the countries should be at par because they have access to the entire basket of goods - either imported or made in house. So, they should be unaffected.