After the rate hike by US Fed and the imposition of negative interest rate by the central bank of Japan effective January 29, the exchange rate of USD against yen have been going downhill – going against common sense.

After an in-depth study conducted jointly by the researchers at ANBOUND Consulting and researchers at Japan, they have come to a conclusion that the upward pressure on yen's appreciation is due to the actual demand instead of the speculative pressure as suggested by the market.

Based on the actual demands, there is still room for yen’s appreciation; however, if certain conditions are fulfilled, a weaker yen is possible.