Changing rates of Appreciation and Depreciation

Question

Elucidate the changing rates of Appreciation and Depreciation?

Answer 1

1. The dollar price of yen increases, if the demand for yen increases which means that dollar reduces comparative to yen.  This might ensue because of many reasons including an increase in U.S. incomes which enables Americans to purchase more Japanese goods, or an increase in partiality for Japanese products.  The result is Japanese goods would become more expensive to Americans and U.S. products would become less expensive to us.

2. If its opposite occurred as well as Japanese incomes increased more than U.S. incomes and/or Japanese preferences for U.S. products increased, then the dollar would appreciate relative to the yen as the yen supply increased.  Americans will purchase a greater quantity of Japanese products because they have become less expensive in dollar terms.